JAPANESE  NOTIONS 


3 W 


OF 

European  Political  Economy 


BEING  A SUMMARY  OF  A VOLUMINOUS  REPORT 
UPON  THAT  SUBJECT  FORWARDED  TO 
THE  JAPANESE  GOVERNMENT 

BY 

TENTEARO  MAKATO 

COMMISSIONER  OF  JAPAN  TO  MAKE  THE  INVESTIGATION 


PRECEDED  BY  A SKETCH  OF  A PRELIMINARY  INQUIRY  INTO  THE 
SAME  SUBJECT  BY  MR.  TEREMOTO,  OF  THE 
JAPANESE  LEGATION 


This  pamphlet  is  especially  commended  to  students  of  political  economy  in  British  and 
American  schools.  For  though  of  physical  athletics  there  may  be  enough,  of  intellectual 
athletics  there  is  need  for  more.  In  these  schools  there  is  no  doubt  much  reading  and  subse- 
quent recitation,  but  this  cultivation  of  the  memory,  though  important,  will  not  alone  produce 
intellectual  strength,  and  if  not  accompanied  by  actual  THOUGHT  is  likely,  by  and  by,  to  result 
in  mental  atrophy. 

The  transcriber  and  translator,  himself  a graduate  of  the  University  of  Pennsylvania,  and  in 
Political  Economy,  too,  had  much  to  overcome  before  accepting,  with  his  Oriental  friends,  the 
radical  views  of  the  report. 

The  decision  of  these  two  educated  Japanese  gentlemen,  given  after  a long  and  earnest 
investigation  upon  a subject  of  such  vital  importance  as  Political  Economy,  will  prove  to  be,  I 
am  sure,  both  entertaining  and  profitable.  Entertaining,  in  that  they  have  deviated  from  paths 
beaten  and  tedious.  Profitable,  in  that  by  questioning  the  highest  scholastic  authority  they 
would  incite  readers  to  think.  For  it  is  only  by  THINKING  FOR  ourselves,  and  in  no  other 
way,  that  we  practice  intellectual  athletics. 


PHILA  DELPHI  A 


PRINTED  UNDER  THE  SUPERVISION  OF  KUYA  SHIHOSHO 


The  genial  transcriber  and  translator  of  this  economic  inquiry,  my  dear 
friend  R.  C.  K.,  lived  only  to  see  it  in  press.  I miss  him  much.  Resigning  his 
office  at  the  capital,  he  had  joined  me  in  Philadelphia,  preparatory  to  establishing, 
in  my  native  land,  schools  for  the  purpose  of  arousing  thought  upon  the  great 
social  questions  now  being  discussed  in  most  European  countries,  and  with  such 
vehemence  in  Great  Britain  and  in  the  United  States. 

1 miss  my  friend,  oh,  how  much  ! Yet  I shall  not  travel  altogether  lonely 
on  my  return  to  Japan.  Tender  thoughts  of  my  friend  will  be  my  company  and 
cheer.  Beside  me  in  spirit  I shall  respire  his  counsel  and  force,  and  be  stimulated 
to  double  work  in  humanity’s  cause. 


The  first  edition  of  ten  thousand  copies  has  been  distributed.  It  has  been 
commended.  Approving  letters  come  from  many  English-speaking  lands.  I am 
thus  pleased  and  encouraged.  This  second  edition,  in  which  I have  made  no 
change  in  my  friend’s  text,  except  the  mention  of  Professor  Andrews’s  change  to 
Chicago  and  the  addition  of  explanatory  foot-notes,  I leave  in  proper  hands  for 
wider  distribution. 

TENTEARO  MAKATO. 


Philadelphia,  December  i,  1898. 


Inquiries  regarding  this  pamphlet  (the  Japanese  officials  and  students  having  returned) 
may  be  addressed  to  James  Love,  627  Market  Street,  Camden,  N.  J. 

Judge  J.  M.  K.,  of  Philadelphia,  father  of  R.  C.  K.,  assumes  the  loving  duty  of  again 
distributing  five  thousand  copies. 


INDEX. 


PAGE 

Teremoto’s  inquiry  (reported  by  R.  , 


C.  K.) s 

Walker,  Francis  A 8 

his  explanations  .....  8 

his  remedies g 

Land  in  political  economy,  note  . . 8 

Writers,  their  disagreements  ...  g 

George,  Henry io 

Makato,  sent  for II 

his  first  interview 1 1 


Makato’s  Report. 


Summary  by  himself 12 

Reforms  in  vogue 13 

Development  of  landlordism  ...  14 

Ideal  republics 14 

The  physiocrats 15 

Smith,  Adam 15 

on  the  universities 24 

his  “ Wealth  of  Nations”  ...  30 

Malthus 16 

Ricardo 16 

Smith’s  followers 17 

Perry,  Arthur  Latham,  LL.D.  ...  17 

definition  of  political  economy  . 18 

of  wealth  18 

of  labor 18 

of  capital 19 

of  land 20 

Andrews,  E.  Benjamin  ......  24 

definition  of  economics  ....  25 

of  wealth 25 

of  capital  25 

of  rent 25 

Marshall,  Alfred 25 

definition  of  political  economy  . 25 

of  capital 26 

of  land 26 

of  production  ......  26 

diminishing  returns  in  agricul- 
ture   26 

a mathematical  sample  ....  26 
wealth 27 


PAGE 


Nicholson,  J.  Shields 

definition  of  political  economy  . 

of  capital 

of  land 

of  labor 

upon  precise  terms 

Dati  and  Honga 

Feudalism  

Definitions  of  political  economy  and 
wealth,  etc.,  from — 

Jean  Baptiste  Say 

Earl  of  Lauderdale 

M.  Sismondi 

Henry  C.  Carey 

Pierre  Joseph  Proudhon  . . . 

M.  Bastiat 

J.  Stuart  Mill 

Carl  Marx 

J.  R.  McCulloch 

William  Nassau  Senior  .... 
Patrick  Edward  Dove  .... 

Amasa  Walker 

Horace  Greeley 

James  E.  Thorold  Rogers  . . 

W.  Stanley  Jevons 

John  E.  Cairnes 

Bonamy  Price 

Emil  de  Laveleye 

Henry  Sidgwick  . 

Simon  Newcomb 

J.  Lawrence  Laughlin  .... 

Francis  A.  Walker 

Van  Buren  Denslow  .... 

Richard  T.  Ely  . 

Henry  D.  Macleod 

Henry  D.  Lloyd 

A.  T.  Hadley 

Maffeo  Pantaleoni  

Mathematics  in  political  economy  . 

Co-operation 

Henry  George 

his  theories 

quotations  from 

(Chattel  slavery 

Prasdial  slavery 

Civilization  : its  spread 

Conclusion 


27 

27 

28 
28 

28 
27 

29 
29 


30 

3° 

30 

31 
31 
3i 
3i 
3i 
3i 
3i 

31 

32 
32 
32 
32 

32 

32 

33 
33 
33 
33 

33 

34 
34 
34 
34 

34 

35 

36 
36 

36 

37 

39 
33 

38 
38 

40 


3 


“ And  while  professors  disagree,  the  ideas  that  there  is  a necessary  conflict  be- 
tween capital  and  labor,  that  machinery  is  an  evil,  that  competition  must  be  restrained 
and  interest  abolished,  that  wealth  may  be  created  by  the  issue  of  money,  that  it  is 
the  duty  of  government  to  furnish  capital  or  to  furnish  work,  are  rapidly  making  way 
among  the  great  body  of  the  people,  who  keenly  feel  a hurt  and  are  sharply  conscious 
of  a wrong.  Such  ideas,  which  bring  great  masses  of  men,  the  repositories  of  ulti- 
mate political  power,  under  the  leadership  of  charlatans  and  demagogues,  are  fraught 
with  dangers ; but  they  cannot  be  successfully  combated  until  political  economy  shall 
give  some  answer  to  the  great  question  which  shall  be  consistent  with  all  her  teach- 
ings, and  which  shall  commend  itself  to  the  perceptions  of  the  great  masses  of  men.” 


“ Wealth  is  the  blood  of  nations.  Congestion  results  when  too  much  is  forced 
into  one  part  of  the  social  body,  and  atrophy  or  paralysis  results  to  the  parts  deprived 
of  it.  But,  above  all,  individual  rights  are  universally  sacrificed  when  riches  are  un- 
justly distributed.  It  was  these  rights  that  the  French  Revolution  sought  to  recon- 
quer. If  we  do  not  wish  to  renew  catastrophies,  we  must  not  renew  the  conditions 
that  produce  them.” — M.  Godin,  founder  of  the  Familist6re  at  Guise. 


“ It  often  happens  that  the  universal  belief  of  one  age  of  mankind — a belief  from 
which  no  one  was,  nor  without  an  extraordinary  effort  of  genius  and  courage,  could 
at  that  time  be  free — becomes  to  a subsequent  age  so  palpable  an  absurdity,  that  the 
only  difficulty  then  is  to  imagine  how  such  a thing  can  ever  have  appeared  credi- 
ble.”— John  Stuart  Mill. 


4 


JAPANESE  NOTIONS 

OF 

EUROPEAN  POLITICAL  ECONOMY. 


For  some  years,  at  Washington,  I had  been  intimate  always  with 
one  or  more  members  of  the  Japanese  embassy,  a relation  brought 
about  by  a long  residence  in  Japan  and  my  familiarity  with  the 
language. 

We  had,  at  times,  discussed  military  matters,  literature,  art ; but 
more  frequently  the  practical  matters  of  progress, — invention,  rail- 
roads, electricity,  production  on  a grand  scale,  and  so  on.  “ The  fac- 
tories,” said  Teremoto  one  evening,  “ with  their  tall,  smoky  chimneys, 
rattling  machinery,  and  increasing  monotony  of  toil,  have  done  our 
Japanese  people,  at  least  our  working-people,  little  good  ; and  accord- 
ing to  your  great  economist  Walker,  and  other  college  teachers,  for 
whose  views,  however,  I have  very  little  respect,  they  are  not  likely  to 
do  any.” 

Surprised  at  the  remark, — for  to  me  “economics”  seemed  as  out 
of  place  in  his  country  as  a boiler-factory  on  Parnassus,  or  the  gospel 
of  Saint  W.  H.  Mallock  in  the  New  Testament  canon, — I asked  if,  in 
Japan,  any  attention  had  been  paid  to  political  economy.  “Until 
lately,”  he  replied,  “it  was,  as  a science,  altogether  unknown,  and 
even  now,  saving  as  a subject  of  governmental  policy  under  the  name 
of  politics,  is  ignored  except  by  men  educated  abroad.  Books,  to 
be  sure,  have  been  written  upon  ‘ Akinawa’  and  ‘Kayura,’  that  is  to 
say,  on  commerce  and  exchange,  and  also  upon  finance,  or  systems 
of  public  loans  and  revenues  ; which  latter  are  somewhat  like  the 
books  of  your  present  school  of  finance,  or  so  called  ‘Economics.’ 
These  books,  as  do  yours,  deal  with  buying  and  selling,  banking,  money, 
and  methods  of  taxation,  teaching  mainly  the  art  of  abducting  the 
honey  without  alarming  the  hive.*  They  have  a great  deal  to  say  about 
‘ Kinsing’  [gold],  ‘ Morso’  [goods],  and  the  ‘ Yama  Midaso’  [foreigner]. 
They  ignore  any  inquiry  into  ‘ distribution,’  or,  if  alluding  to  it  at 
all,  tacitly  assume  that  the  present  distribution  of  the  produced  wealth 
is  between  laborers  and  capitalists  (including  land-owners  with  the 
latter),  and  that  it  is  based  upon  unavoidable  natural  law. 

“ However,  the  initiative  to  my  study  of  this  matter  did  not  spring 
from  myself.  I had  never  consciously  thought  about  it  at  all.  In  every 
country,  at  least  in  all  civilized  countries, — Japan,  Corea,  China,  Siam, 
Hindostan,  Europe,  America, — there  are  some  so  rich  as  to  be  wasteful 
and  destructive,  and  many  so  poor  as  to  be  in  want,  conditions  result- 


* Under  the  name  of  “ Economics”  the  teaching  of  political  economy  has  really 
been  abandoned.  What  is  now  called  “ The  Science  of  Exchange,”  “ The  Science 
of  Values,”  “ The  Science,”  as  Macleod  has  it,  “ which  treats  of  the  laws  which 
govern  the  relations  of  exchangeable  quantities,” — if  it  is  science  at  all,  should  be 
classified  under  the  head  of  mathematics. — Maicato. 


5 


6 Japanese  Notions  of  European  Political  Economy. 

ing,  I had  thought,  from  innate  differences  in  individuals  : unchange- 
able ordinances  of  nature. 

“But  about  three  years  ago  Mr.  Neesima,  Minister  of  Education, 
through  the  foreign  office,  wrote  to  our  minister  here,  in  brief,  that  in 
Japan  the  effect  of  labor-saving  machinery,  steam-engines,  and  great 
factories  had  not  tended  to  reduce  the  hours  of  labor  or  to  relieve 
women  and  children  from  excessive  work.  Mr.  Neesima  had  fondly 
believed  that  these  wealth-producing  devices  would  tend  towards 
leisure  and  opportunity,  and  that  his  schools  would  shortly  contain  all 
the  children  in  the  land.  Yet  in  Yokohama,  Tokyo,  Osaka,  and 
throughout  ‘ Dai  Nippon’  the  effect  seems  to  have  been  the  very  re- 
verse, and  the  workingman’s  life  has  become  not  easier,  but  harder. 
They  have  made  the  cost  of  living  greater  and  life  more  anxious. 
Factories  are  filling  up  with  children  working  fourteen  hours  daily ; 
and  lines  of  little  boys  and  girls  aged  from  ten  to  fourteen,  at  our  sea- 
ports, are  employed,  for  a pittance,  to  coal  great  ocean  steamships. 
Coolies  still  go  naked  ; women  labor  in  the  fields  with  babes  strapped 
to  their  backs ; and  now,  in  case  of  short  crops,  the  small  farmers  and 
laborers  have  no  ‘ Damios’  to  fall  back  upon.  Facilities  for  mort- 
gaging have  increased,  and  the  land  seems  to  be  passing  to  large 
holders.  The  machines,  he  said,  unquestionably  do  our  working- 
classes  harm,  and  it  is  really  to  be  feared  that  the  fierce  competitive 
spirit  that  is  engendering  will  eventually  obliterate  what  we  have  of 
antique,  picturesque,  and  lovely  among  the  Japanese  people. 

“‘Make  inquiry,’  wrote  Ishtamusho,  head  of  the  foreign  office, 

‘ in  those  places  where  these  wonderful  machines  are  most  used,  as  to 
their  social  effects,  and  learn  what  methods,  if  any,  have  been  adopted 
to  cause  them  to  bring  that  comfort  and  leisure  to  the  masses  for  which 
they  were  evidently  devised.’  The  embassador  was  directed  to  em- 
ploy such  experts  and  incur  such  expense  as  might  be  dictated  by  his 
judgment,  ‘on  which  the  Mikado’s  government  confidently  relied.’ 

“ I was  then,”  said  Teremoto,  “ an  unpaid  attache,  and  the  embas- 
sador, handing  me  the  despatch,  directed  that  I should  make,  in  one  or 
more  of  the  manufacturing  cities,  a preliminary  investigation. 

“ This  I did.  In  Philadelphia  I saw  a new  phase  of  American  life. 
On  a former  visit,  with  apartments  in  the  Continental,  I had  seen,  I 
now  found,  but  the  upper  side  of  things, — art-galleries,  museums, 
libraries,  colleges,  costly  churches,  elegant  dwellings,  and  well-to-do 
distinguished  people.  1 had  too,  no  doubt,  seen  great  department 
stores,  ship-yards,  and  locomotive-works,  but  all  from  the  point  of 
view  of  a well-fed  and  contented  man.  My  attention  had  not  been 
attracted  to  the  workers,  except  that  they  appeared  to  be  better  clothed, 
better  fed,  better  housed,  and  apparently  happier  than  with  us. 

“I  now,  under  my  instructions,  was  to  abjure  the  civilities  of  the 
rich  in  order  to  spend  my  time  among  and  learn  something  about  the 
poor.  My  former  perceptions  I soon  found  to  be  illusive.  The  better 
dress,  houses,  furniture,  more  varied  food  of  these  people  was  accom- 
panied, I was  surprised  to  find,  with  more  tension,  more  anxiety,  and 
1 think  with  less  happiness  than  among  the  same  classes  in  Japan.  In 
factories,  amid  the  roar  of  labor-saving  machinery,  I found  consider- 
able numbers  of  children  and  young  people  of  both  sexes  working  ten 
hours  daily,  which  with  the  noon  hour  and  the  half-hours  occupied  in 
going  and  returning,  make  a twelve-hour  day  ; called  to  toil  by  shrieking 
steam- whistles  and  so  fearful  of  being  docked  or  discharged  that  usu- 
ally the  larger  part  of  them  were  waiting  at  the  factory  doors  fifteen  to 


Japanese  Notions  of  European  Political  Economy.  7 

thirty  minutes  before  time.  Posted  conspicuously  about  the  rooms  I 
saw  ‘The  Rules,’  rigidly  forbidding  talk,  forbidding  friends  to  enter, 
and  so  on,  enforced  by  fines.  I found  that  with  the  lapse  of  time 
machines  have  been  speeded  faster  and  faster,  and  that  sometimes  one 
person  who  formerly  ran  but  one  machine,  now  runs  two,  three,  or 
even  more.  In  cotton-factories  one  young  woman  now  has  charge  of 
four  looms,  and  occasionally  five.  I found  that  these  workers  rarely 
owned  their  own  homes,  three-fourths  at  least  being  tenants  liable 
to  eviction  upon  thirty  days’  notice.  Wages  seemed  to  be  no  more 
than  a bare  living,  though  at  a much  higher  standard  than  in  Japan, 
very  few  accumulating  anything.  In  the  coal-mining  regions  of 
Pennsylvania,  Ohio,  and  Illinois  what  they  choose  to  call  liberty  is 
really  abject  slavery.  The  coal  companies  usually  own  all  the  houses 
occupied  by  the  miners,  and  hold  eviction  over  their  heads.  Besides 
they  maintain  company  stores  charging  higher  prices  and  deducting 
bills  weekly  from  wages.  This  far-underground,  unwholesome,  and 
dangerous  toil  is  wretchedly  paid,  and  although  the  legal  age  in  Penn- 
sylvania is  twelve,  many  boys  much  younger  are  at  work.  Attempts 
to  better  things  have  usually  been  defeated  by  importing  brutalized 
laborers  from  the  east  of  Europe,  or  negroes,  satisfied  with  slave 
wages,  from  the  South.  To  improve  these  conditions  labor  unions  had 
been  formed,  but  were  commonly  defeated  by  the  men  and  women  out 
of  work  and  struggling  to  get  it.  Strange  fact  (now  first  called  to 
my  attention,  although  prevailing  in  Japan),  many  cannot  get  work 
at  all,  while  those  at  work  must  toil  to  exhaustion.  In  our  loved  land, 
however,  the  contrasts  are  less  serious.  Between  rich  and  poor  the  gulf 
is  narrower.  Our  dwellings  do  not  indicate  such  great  extremes,  and 
the  politeness  of  our  working-people  is  in  marked  contrast  to  the  rude- 
ness, passionate  profanity,  and  threats  of  American  streets. 

“ Puzzled  to  account  for  phenomena  that  I felt  must  have  an  expla- 
nation, I visited  Pittsburg,  Chicago,  then  Boston,  where,  ignoring  the 
truth  that  we  are  immediately  descended  from  two  parents,  then  four, 
eight,  sixteen,  thirty-two,  in  geometric  progression,  they  trace  social 
differences  to  heredity,  and  finally  New  York,  in  all  finding  similar 
conditions.  Then  taking  to  books,  I soon  found  that  inequalities  of 
the  same  kind  prevailed  all  over  Europe.  The  countries  had  grown 
rich,  but  the  gains  had  not  been  general ; and  as  to  happiness,  I could 
only  think  that  there  had  been  no  gain  at  all ; for,  in  America  espe- 
cially, the  great  body  of  the  people  are  becoming  intelligent  enough 
to  chafe  at  their  inability  to  secure  what  they  feel  to  be  their  due.  An 
excessive  nervous  tension  results,  recognizable  in  their  neglect  of  tea 
(alone  used  in  Japan)  for  the  maddening  stimulants,  whiskey  and  beer, 
and  for  the  dreadful  sedative  tobacco,  disgustingly  smoked  and 
chewed.* 

“ How  is  this?  I said  to  the  librarian  there.  It  is  the  natural 
order,  he  replied,  springing  from  that  tendency  in  mankind  to  in- 


* This  strain  is  by  no  means  confined  to  the  manual  working-classes.  It  is  very 
noticeable  among  the  mercantile  and  manufacturing  as  well,  in  their  expensive  and 
underbidding  newspaper  advertisements,  sign-boards  upon  distant  road-sides,  or 
disfiguring  mountain  scenery  and  sea-side  resorts,  or  store-front  announcements, — 
“ Selling  off  at  Cost,”  “ Prices  cut  in  Half,”  “ Great  Summer-Reduction  Sale.”  Be- 
sides, one  is  startled  at  the  immense  number  of  suits  at  law.  These  people  get  no 
rest.  Business,  the  “struggle  for  existence,”  occupies  their  entire  thoughts.  Surely 
now  (if  not  before)  in  this  age  of  undreamed-of  wealth-producing  machines  all  men 
are  entitled  to  higher  lives  than  this. — Makato. 


8 Japanese  Notions  of  European  Political  Economy. 

crease  their  numbers  up  to  the  limit  of  subsistence,  the  inevitable 
struggle  for  life.*  He  first  mentioned  economics  and  ‘ the  natural 
tendency  of  wages  to  a minimum,’  and  called  my  attention  to  the 
alcove,  ‘Political  Economy,  Finance,  Socialistics. ’ Tens  of  thou- 
sands of  volumes,  he  said,  had  been  written  in  all  languages ; here 
were  only  some  hundreds  of  the  more  widely  known.  Amid  all  this 
literature,  said  I,  bewildered,  point  to  one  that  briefly  explains  this 
‘law  of  wages.’  Point  to  some  glimmer  at  least  that  may  lead  to 
further  light.  Here,  he  exclaimed,  is  what  you  need.  It  is  by  a 
man  who  in  the  schools  holds  the  highest  rank, — Professor  Francis  A. 
Walker,  M.A.,  Ph.D.  (and  since  then  LL.D.),  professor,  etc.,  and 
deals  with  the  ‘ Wages  Question.’  ” 

“This  book  was  neither  pleasant  reading  nor  easy.  Dogmatic  in 
its  tone,  unenlivened  by  illustration,  no  enthusiasm  is  felt,  and  no  in- 
dignation, except  (later)  towards  writers  less  pessimistic  than  himself, 
‘apostles  of  a new  political  economy  and  a regenerated  humanity,’ 
who  question  his  premises  or  logic. 

“ In  the  opening  paragraph  he  writes,  ‘ All  wealth  has,  of  course,  to 
be  produced  in  the  first  place ; and,  moreover,  it  is  produced  to  be 
consumed,  and  for  this  end  alone,’  and  yet  he  proceeds  to  treat  landf 
as  wealth.  Though  how  land  can  be  produced  and  consumed  he  fails 
to  explain;  while  in  another  work  his  ‘Political  Economy,’  after 
assenting  to  the  formula  of  most  writers  that  land,  labor,  and  capital 
are  ‘ the  three  primary  factors  in  the  production  of  wealth,’  defines 
wealth  to  be  ‘all  articles  of  value  and  nothing  else,’  of  course  in- 
cluding land,  failing  altogether,  like  most  of  the  professors,  to  note 
this  ‘ contradiction  of  terms.  ’ 

“ The  pictures  he  presents  of  child-labor  in  England — little  girls  in 
brick-yards  and  agricultural  gangs  of  children  of  both  sexes,  aged  from 
four  to  ten — can  by  any  sensitive  man  be  read  only  by  an  effort  and 
with  tears.  No  such  degradation  can  be  found  among  any  of  the 
peoples  to  whom  the  English  send  missionaries.  No  such  examples  of 
devilish  toil  can  be  found  except  where  powers  have  been  utilized  and 
machines  invented  to  produce  ‘ wealth’  with  undreamed-of  ease. 

“ This  is  the  paradox  of  progress. 

“ Walker’s  explanations  are,  first,  ‘ the  Malthusian  law,’ — that  the 
spiritual  being,  man,  like  instinctive  beings,  animals,  tends  to  increase 
faster  than  the  food-supply;  and,  second,  that  the  inadequate  supply 
is  because  of  ‘ the  law  of  diminishing  returns  in  agriculture’ ; that  is 


* Malthus,  the  author  of  this  theory,  thinks  that  man  has  a tendency  to  increase  in 
geometric  progression,  and  his  food  only  in  arithmetic.  But,  in  procreation,  man 
is  not  guided  as  the  animals,  wholly  by  impulse.  How  could  any  thinking  man 
have  presented  such  a theory?  How  could  a thinking  age  accept  it?  Men  increase 
faster  than  the  food  supply  ! Consider  the  progeny  reared  by  one  hen  ; the  millions 
of  eggs  spawned  by  one  fish ; an  acre  of  bananas  producing  one  hundred  and 
thirty-three  times  as  much  food  as  an  acre  of  wheat,  that  with  good  culture  yields 
fifty-fold.  Is  there  not  upon  the  island  of  Manhattan  to-day,  with  two  millions  of 
people,  not  only  more  food,  but  better  and  more  varied  food,  per  unit  of  population, 
than  one  hundred  years  ago?  than  two  hundred  years  ago  to  each  unit?  Can  the 
poverty  of  that  island  be  traced  to  want  of  food  ? — Makato. 

f “ Land”  in  political  economy  means  the  universe  outside  of  man, — all  that 
external  nature  offers  to  the  use  of  man,  including  not  only  the  solid  surface  of  the 
earth,  but  air,  ocean,  rivers,  sunlight,  rainfall,  wind-power,  gravitation,  and  so  on. 
For  the  owners  of  land  own,  of  course,  the  landing-place  of  ships  and  seines,  the 
rainfall,  air,  and  all  the  rest.  Perry  and  many  recent  writers  speak  of  “ natural 
agents”  and  ]a.nd.  The  first  free  and  valueless;  the  second,  as  they  attempt  to  show, 
made  valuable  by  the  individual  owners. — Makato. 


9 


Japanese  Notions  of  European  Political  Economy. 

to  say,  because  that  men  whose  wants  grow  with  their  ability  to  gratify 
them  will  reproduce  their  kind  as  do  the  animals,  whose  wants  are  defi- 
nite and  fixed ; and  also  because  any  certain  extent  of  ground,  as  a 
square  rod  or  an  acre,  will  not  forever  continue  to  return  to  increased 
exertion  (‘successive  doses  of  labor’)  a corresponding  increase  of 
bricks  or  blankets,  cabbages  or  clothing,  hay  or  houses, — that  is,  of 
‘ wealth’ ; in  short,  because  all  girls  of  twelve  or  thirteen  will  there- 
after produce  young  with  the  regularity  of  rabbits,  and  because  the 
necessaries  produced  on  an  acre  might  not  suffice  for  a province ; 
therefore  there  follow  low  wages  and  want,  not  impartially  to  all 
people  alike,  not  to  professors  of  economics,  nobles,  great  landlords, 
and  monopolists,  but  only — strangest  proposition  of  all — to  the  classes 
who  produce  the  wealth  ! 

“Though,  to  a thinking  Japanese,  these  propositions  may  seem  too 
absurd  for  controversy,  they  are,  in  fact,  the  very  foundations  of  the 
economic  structure  which  Walker  and  the  schools  have  built ; a 
structure  buttressed  with  a further  theory  that,  though  the  laborer 
evidently  produces  and  advances  ‘ capital’  or  ‘ wealth’  to  his  em- 
ployer, and  of  more  value  than  his  ‘ wages’  at  the  end  of  the  week, 
no  more  laborers  can  find  employment  than  there  is  capital  to  ad- 
vance to  them  their  wages  ! 

“A  melancholy  system  ! Too  dark  for  the  dark  ages  ! A Baby- 
lonian tower  that,  erected  in  utter  misconception  of  the  sky,  ends  in  a 
confusion  of  tongues  and  a dismal  ruin  of  clay. 

“ His  remedies — the  trite  ones  preached  from  pulpits  and  urged  by 
moralists  of  Europe  for  centuries,  or  that  have  been  ineffectually 
attempted  by  legislation  again  and  again — are, — 

“ i.  Frugality  and  temperance. 

“ 2.  The  spreading  of  individual  and  mutual  intelligence  among 
working-people. 

“3.  Sexual  self-restraint. 

“ 4.  Factory  acts  by  legislative  bodies. 

“5.  The  inculcation  of  sympathy  and  respect  in  the  community  for 
laborers.* 

“ In  Japan  no  old  writer  that  I know  of  mentions  saving  as  merito- 
rious. Sawa,  last  century,  says,  ‘ Gato,  by  taking  no  wife,  rearing  no 
children,  and  eating  rice  only,  got  rich.  But,’  moralizes  Sawa,  ‘ where 
would  be,  if  all  laborers  acted  as  Gato,  the  next  generation  of  workers 
and  soldiers?  Truly,  it  flashes  upon  my  melancholy  wit  that,  though 
we  love  silk  gowns  and  idle  lives,  the  Mikado,  the  Shogun,  the  princes, 
the  priests,  and  my  worthy  self  should  raise  silk  and  rice  for  ourselves ; 
and  no  lives  could  be  offered  upon  the  altars  of  patriotism  but  our 
own.’ 

“ After  spending  some  days  upon  Walker,  my  librarian  guided  me 
to  others.  But  the  tenor  of  all  was  the  same.  For  existing  social  con- 
ditions nature,  chiefly,  is  responsible.  They  are  dreamers  and  ‘ Uto- 
pians’ who  believe  that  much  change  is  possible.  For  the  rest  there 
was  great  disagreement. 

“ They  disputed  about  the  nature  of  wealth,  of  value,  interest,  rent. 
They  were  unsettled  as  to  the  law  of  wages,  matters  lying  at  the  very 


* Why,  it  might  be  asked,  is  labor  so  helpless,  and  “ capital”  so  able  to  take  care 
of  itself?  Surely  labor  produces  not  only  all  capital,  but  all  wealth.  Yet,  accord- 
ing to  these  writers,  it  is  naturally  a poor  thing,  needing  “protection”  at  all  times 
and  sympathy. — Makato. 


io  Japanese  Notions  of  European  Political  Economy. 

base  of  their  structure.  They  disagreed  as  to  the  very  scope  of  politi- 
cal economy.  About  the  only  matters  upon  which  I found  a consensus 
of  opinion  were,  first,  that  the  poor  are  a mere  matting,  made  to  be 
trodden  upon  ; second,  that  it  is  natural  that  men  should  find  diffi- 
culty in  getting  employment ; third,  that  it  is  natural  that  wages 
should  tend  to  a minimum  merely  sufficient  for  support.  And  with 
all  of  them  there  is  a great  deal  of  talk  about  over-production  of  wealth 
and  over-production  of  men. 

“ To  be  sure,  I had  never  before  attempted  to  explain  these  mat- 
ters ; had,  in  fact,  never  thought  of  them  at  all ; but  in  the  presence  of 
these  attempts  to  explain  them  I stood  aghast.  I felt  in  my  soul  that 
the  peoples  who  had  made  these  prodigious  material  advances  had  failed 
in  the  moral  one.  With  ever  more  and  more  powerful  tools,  capable 
of  results  that  belittle  Aladdin’s  genii,  to  conclude  that  the  inventing 
workingman  can  hope  only  for  a bare  living  wage  ! With  machinery 
turning  out  four-panelled,  finished  doors,  daily  twenty-five  to  the  man  ; 
planing,  tonguing,  and  grooving  flooring  fifty  times  faster  than  for- 
merly by  hand  ; making  blinds,  sash,  glass,  bricks,  roofing,  nails, 
paints,  wall-paper,  and  transporting  them,  too,  with  so  much  greater 
ease  than  at  the  beginning  of  the  century,  it  is  harder  for  the  ordinary 
workingman  to  own  his  own  home  now  at  its  close.  So  hard  that  in 
1890,  in  New  York  City,  ninety-four  families  in  each  hundred  were 
tenants,  many  of  them  packed  so  closely  in  unsanitary  tenements  as 
to  be  not  only  a social  menace,  but  a bitter  satire  upon  the  Christianity 
of  the  times. 

“ The  light  that  I sought  did  not  come  from  the  schools.  In  New 
York  City  a discussion  was  going  on  upon  ‘ Tenement-House  Reform,’ 
and  at  a great  meeting  held  in  Cooper  Union,  Mr.  Henry  George’s 
speech  advocating,  as  the  only  reasonable  and  business-like  way  to 
accomplish  permanent  good,  the  abandonment  of  taxing  houses  and 
goods,  to  concentrate  all  tax  upon  the  value  of  lots,  made  a sensation. 
Under  the  prevailing  private  ownership  of  land,  he  urged,  and  the  con- 
sequent difficulty  of  getting  work,  there  results  a severe  and  one-sided 
competition  among  workingmen  of  all  kinds,  tending  to  force  wages 
always  to  a minimum.  And  that,  even  if  they  could  be  offered  good 
dwellings  free  of  any  rent  at  all,  the  ultimate  result  would  be  a reduc- 
tion of  money  wages  to  the  full  extent  of  the  avoided  rent,  as  in  the 
case  of  the  parish  relief  extended  to  farm  laborers  in  England  some 
sixty  years  ago. 

“ By  concentrating  tax  upon  the  value  of  lots  not  only  would  lots 
now  held  vacant  by  speculators  be  at  once  offered  to  builders  at  lower 
prices,  but  by  the  removal  of  taxation  from  buildings  there  would  be 
encouragement  to  build.  Lot  monopoly  being  broken,  tenement- 
house  crowding  and  suffering  would  be  bettered,  to  be  ultimately,  by 
the  widening  of  the  area  of  the  single  tax,  cured  altogether. 

“ Though  my  librarian  pooh-poohed  it,  declaring  that  George  was 
wholly  untrained  and  unscientific,  I procured  at  a store  a copy  of  his 
‘ Land  Question.’  What  a relief  from  the  dread  literature  I had  been 
involved  in  ! Here  was  logical  exactness  at  last,  illuminated  by  a 
facility  of  forceful  illustration  and  flashes  of  wonderful  eloquence ; a 
style  lucid  and  sparkling  as  the  Kohinoor  diamond.  But,  such  is  the 
power  of  habit,  I could  not  then  free  myself  from  the  customs  of  my 
. time.  Though  the  light  had  dawned  brilliantly  upon  me,  to  my  then 
dulled  eyes  it  was  merely  a glimmer.  But  it  was  anyhow  a glimmer.  I 
recalled,  too,  the  remarks  that  I had  heard  on  a train  in  Illinois,  after 


Japanese  Notions  of  European  Political  Economy.  1 1 

having  passed  through  a remarkably  well-cultivated  and  thrifty  tract  of 
farms.  It  was  a ‘school  section,’  my  informant  said,  that  the  trustees 
had  fortunately  retained,  instead  of  alienating  at  an  early  day,  as  had 
generally  been  done.  This  section  now  brought  in  rent  to  the  school 
district  as  much  per  acre  annually  as  others  had  sold  for  in  fee.  A 
gentleman  in  the  next  seat  remarked,  ‘ Why  might  not  the  land  of 
this  whole  State  have  been  thus  fortunately  retained  ?’ — a question 
that  now  recurred  to  me  with  force. 

“ Nearly  a year  had  elapsed  when  I made  my  report  to  Mr.  Iwashida, 
my  chief,  in  which  I explained  that,  feeling  myself  to  be  incompetent, 

I would  suggest  as  commissioner  to  pursue  the  investigation  a gentle- 
man fully  equipped,  Mr.  Tentearo  Makato,  who  had  graduated  at  Yale 
under  Professor  Sumner,  following  a previous  study  at  Columbia  under 
Professors  Mayo  Smith  and  Seligman. 

“At  the  request  of  the  embassador  Makato  came  to  Washington, 
where  during  several  evenings  the  matter  was  by  all  three  freely  dis- 
cussed. Makato  expressed  himself  as  unfavorably  impressed  by  the 
teachings  he  had  received,  and  declared  that  the  books  recommended 
and  praised  by  the  teachers  seemed  to  him  to  be  abstruse,  contra- 
dictory, and  incomprehensible.  He  felt  confident  that  no  one  of  them 
satisfactorily  explained  the  perceived  phenomena.  ‘ In  this  so-called 
science,’  he  said,  ‘there  is  wide  divergence  of  opinion,  and,  unlike 
chemistry,  or  physics,  or  astronomy,  there  is  no  consistent  body  of 
accepted  truth.  The  feeling  on  the  part  of  many  had  been  that  ma- 
terial progress  itself  would  eventually  bring  the  hoped-for  moral  re- 
sult ; though  others  hold  that  it  can  come  only  by  the  slow  process  of 
Natural  Selection,  causing  a necessary  change  in  the  structure  and 
size  of  the  brain.  But,  so  far,  ‘ Disappointment  has  kept  pace  with 
Time,  and,  outside  the  schools,  Discontent  is  exciting  her  hosts  to 
passion.’  I feel  sure,  he  said,  though  in  Japan  we  have  not  hitherto 
moved  in  this  direction  at  all,  that  when  we  do  we  will,  taking  com- 
mon sense  for  a guide,  succeed  in  threading  through  this  mammoth 
cave  of  confusions  to  light.  For  our  students,  having  far  less  to 
unlearn  than  their  European  fellows,  are  for  this  very  reason  seem- 
ingly brighter.  They  are,  to  be  sure,  like  Europeans,  born  into  a web 
of  customs,  beliefs,  traditions,  laws,  hard  to  be  freed  from.  But  this 
web  has  not,  by  a long  succession  of  “thinkers,”  been  made  to  appear 
a beneficent  entanglement  established  by  natural  law,  the  attempt  to 
escape  from  which  is  to  be  condemned  as  unscientific  and  absurd.’ 

“Except  an  occasional  brief  letter  and  a draft  for  expenses,  we 
heard  nothing  from  the  Commissioner  for  nearly  a year;  when  he  re- 
turned to  explain  that  he  deemed  it  prudent  to  delay  his  report  for  a 
time.  ‘ Notwithstanding,’  he  said,  ‘ that  in  Japan  we  have  not  formu- 
lated rules  of  reasoning,  we  have  in  the  maxim  “ Proof  is  better  than 
argument”  a suggestion  of  the  “logic”  largely  used  by  the  professional 
economists,  who  have  unconsciously  anchored  themselves  to  this  fallacy, 
“Post  hoc  ergo  propter  hoc”  (after  this  therefore  because  of  this), 
which  by  the  logicians  they  have  been  so  warned  to  avoid.’ 

“ He  had  first  asked  the  question,  The  inequalities  that  exist  in 
Japan,- — great  riches  and  landed  estates  on  one  side,  beggary  and  com- 
plete landlessness  on  the  other, — here  amid  the  roar  of  steam-driven 
wealth- producing  machines,  do  they  also  exist  ? And  then  the  further 
questions,  Are  these  extremes  in  any  way  related  ? and,  Is  such  an 
unequal  distribution  of  wealth  because  of  conformity  to  or  non- 
conformity to  natural  law  ? 


12  Japanese  Notions  of  European  Political  Economy. 

“ It  was  these  further  questions  that  had  delayed  him.  The  ‘ why’ 
taught  in  the  schools  was  extremely  unsatisfactory ; and  their  remedies, 
no  better,  are  mere  ‘ Mended  lids  to  cracked  pots.’ 

“Well,  some  months  later  Makato  again  appeared  in  Washington, 
this  time  with  his  report.  The  manuscript,  quite  voluminous,  was  ac- 
companied by  certain  entire  printed  books. 

“ At  the  embassador’s  suggestion,  this  report  was  summarized  in  a 
preliminary  paper  adapted  to  ordinary  comprehensions  in  Japan.  The 
whole  was  thereupon  forwarded  to  the  Mikado’s  government  at  Tokyo, 
and  after  a short  delay  is  now,  I believe,  going  through  the  press 
there.  The  effect  that  it  will  have  upon  Japanese  thought  may  seem 
slight  for  a time,  but  in  the  end  I believe  it  will  be  profound.” 

Mr.  Teremoto  having  furnished  me  with  a copy,  and  feeling  it  to 
be  so  important,  this  summary  I have  translated  and  herewith  print. 


THE  SUMMARY. 

[An  accompanying  despatch  from  the  embassador  to  Japanese  Foreign  Office 

omitted.] 

“ Washington,  D.  C.,  United  States  of  America, 

“ To  M.  IWASHIDA,  “ February  28,  1898. 

“ Embassador,  etc.  : 

“ Your  Excellency, — In  accord  with  instructions  given  me  in 
January,  1896,  commanding  an  investigation  (for  the  use  of  the 
Department  of  Education)  into  the  condition  of  laborers  in  America 
and  Europe,  the  scientific  explanation  of  such  conditions,  and  the 
remedial  measures  adopted,  I took  an  early  opportunity  to  visit  the 
great  manufacturing  cities  of  Pennsylvania  and  New  York,  and  also  of 
the  West,  where  I found  full  verification  of  the  facts  reported  by  Mr. 
Inomoto,  whose  investigations,  briefly  sketched,  are  prefixed  to  this. 
But  I went  further,  devoting  twenty-four  months  in  all,  reaching  in  my 
investigations  European  countries. 

“ It  would  too  much  extend  this  paper  to  cite  a hundredth  part  of 
the  printed  facts  accompanying  main  report ; but  Mr.  Henry  George’s 
papers  upon  ‘ Labor  in  Pennsylvania,’  the  reports  of  the  labor  bureaus 
of  Pennsylvania  and  other  States,  ‘ The  Bitter  Cry  of  Outcast  Lon- 
don,’ ‘The  Poor  of  Great  Cities’  (in  America  and  Europe,  by  sundry 
writers  familiar  with  each  site),  ‘ How  the  Other  Half  lives’  (a  sketch 
of  poverty  in  New  York  City,  by  Reis),  ‘ London  Labor  and  London 
Poor,’  ‘ Reports  of  Commissions  upon  the  Better  Housing  of  the  Poor’ 
of  New  York  City,  and  others,  all  show  a most  painful,  I might  say 
frightful,  condition  of  overwork,  poverty,  and  want  in  the  very  centres 
of  ‘civilization’  and  of  wealth.  ‘The  tramp  has  come  in  with  the 
locomotive,  and  almshouses  and  prisons  have  marked  material  progress, 
as  well  as  have  costly  dwellings,  rich  warehouses,  and  magnificent 
churches.  Upon  streets  lighted  with  gas  and  patrolled  by  uniformed 
policemen  beggars  wait  for  the  passer-by,  and  in  the  shadow  of  college 
and  library  and  museum  are  gathering  the  more  hideous  Huns  and 
fiercer  Vandals  of  whom  Macaulay  prophesied.’  Here  is  the  problem 
to  be  solved.  What  unseen  agency  is  it  that,  abstracting  from  the 
masses  in  the  United  States  and  Great  Britain  wealth  measured  by 
hundreds,  yea,  by  thousands  of  millions  of  dollars  annually,  permits 
it  to  be  gambled  for,  enjoyed,  and  often  ridiculously  wasted,  by  men 
who  take  no  part  in  its  production  ? 


13 


Japanese  Notions  of  European  Political  Economy. 

“ Before  the  American  Revolution,  before  these  machines  and 
powers  came  into  use,  the  tramp  and  the  millionaire  had  not  yet  devel- 
oped ; each  class  a complement  to  the  other,  each  a menace  to  free 
institutions,  is  each,  apparently,  equally  proof  to  any  severity  of  law. 

“ My  interest  was  greatly  excited,  for  conditions  of  the  same  kind, 
though  of  less  intensity,  prevail  in  Japan.  But  admitting,  as  I tacitly 
had,  that,  using  our  primitive  tools,  the  workers  should  be  poor,  why, 
after  invention  has  increased  their  power  fifty-fold  or  a hundred-fold, 
should  they  still  be  poor  ? 

“ I found  many  projected  reforms,  the  postulate  of  each  being  that 
social  disorder  is  due  to  the  non-appreciation  of  the  belief  it  would 
teach.  The  principal  of  these  movements  to  some  extent  actually  in 
practice  are  in  the  direction  of, — 

“ i.  Inculcating  religious  ‘ truth.’ 

“ 2.  Prohibition,  or  restraint  of  the  use  of  intoxicants. 

“ 3.  Frugality  and  saving. 

“ 4.  Taxing  commerce,  or  ‘protection.’ 

“5.  Removing  taxes  from  commerce,  or  free-trade. 

“ 6.  Improving  the  housing  of  the  poor. 

“7.  The  institution  (as  in  Ireland)  of  peasant  proprietorship. 

“ 8.  Restraining  the  immigration  of  laborers. 

“9.  Increasing  charity. 

“10.  More  and  better  schools. 

“ 11.  Co-operation  between  labor  and  capital. 

“Other  ‘reforms,’  each  with  a considerable  following,  but  hardly 
yet  attempted  in  practice,  are, — 

“State  Socialism. — The  organization  of  society  somewhat  as  an 
army.  A project  for  the  governmental  ‘ control  of  all  machinery  of 
production.’  Civil  law  carried  to  an  extreme,  and  government  execu- 
tives directing  all  industry. 

“Anarchism. — Directly  in  opposition  to  the  above,  being  no  less 
than  the  abolition  of  all  civil  law. 

“ Communism. — The  production  of  wealth  in  common  by  the  com- 
munity. No  individual  property. 

“Nihilism  (confined  to  Russia,  I think). — The  overthrow  of  des- 
potic government  and  the  setting  up  of  representative. 

“ Yet,  whatever  of  evil  these  reformers  pointed  out  seemed  to  me 
to  be  caused  either  by  the  natural  impulses  of  men,  or  by  some  greater 
but  unrecognized  underlying  evil.  With,  I think,  little  depth  of 
search,  they  assume  that  men,  women,  and  children  naturally  work 
themselves  to  disease  and  death ; are  naturally  intemperate ; natu- 
rally dwell  in  crowded,  unwholesome  tenements ; naturally  find  it 
hard  to  get  work  when  they  wish  to  go  to  work,  and  are  naturally 
landless.  And  such  of  these  reforms  as  are  within  range  of  possi- 
bility (some  are  wholly  impracticable)  if  carried  into  practice  would 
be  of  ill  effect,  or  of  little  effect,  or,  at  best,  the  merest  palliatives, 
although  of  two  or  three  of  them  it  might  be  said  that  their  direction 
is  right.” 


In  China,  in  Hindostan,  in  our  own  loved  Japan,  civilization  is  so 
very  ancient  that  the  oldest  records  do  not  deal  with  conditions  very 
different  from  the  present  ; yet  in  the  old  days  some  wise  men  saw  and 
occasionally  hinted  at  that  “ grave  injustice  of  men”  which  long  con- 
tinued custom  now  presents  to  us  as  the  justice  of  God,  and  that  no  one 
for  ages  has  questioned.  Shihosho,  in  “ The  Peasant’s  Woe,”  sings, — 


14  Japanese  Notions  of  European  Political  Economy. 


“ Ah  ! my  man,  my  brave  and  patient  worker  ; the  Daimio  owns  the  soil,  the 
winds,  the  rain,  the  very  air  thou  breathest.  Work,  work,  thou  patient  slave.  For 
thou  art  a slave.”  And  in  the  same  song,  Omari,  the  priest,  tells  the  peasant,  “ I 
don’t  wish  to  cultivate  rice  in  a marsh  and  in  the  hot  sun.”  “ Well ! But  you  need 
rice!”  “ Truly,”  replies  Omari,  “ but  are  there  not  tithes ?”  And  that  divine  man 
Sebayama  of  old,  sings,  “ Ah  ! the  lot  of  the  worker!  His  sad  lot.  I think  of  it 
and  weep.  Japan  is  a Kanguri  tree;  its  few  leaves  beautiful  and  breezy;  its  sum- 
mit crowned  with  bright  flowers  and  fruit ; yet,  supporting  all,  the  great  net-work  of 
roots  grovel  in  darkness  in  the  ground.” 

Of  the  northern  European,  a comparative  new  civilization,  how- 
ever, more  is  known.  In  Britain  and  in  Germany  Ctesar  found  a 
people  brave  and  liberty  loving,  among  whom  was  a fair  equality  of 
condition.  How  that  original  tribal  freedom  gradually  gave  way  to 
vassalage  under  the  supremacy  of  feudal  chiefs,  and  how,  later  on, 
with  the  decline  of  feudalism  there  developed  a system  of  direct  and 
indirect  personal  taxes,  money-rents,  and  “serfage,”  is  clearly  known. 
And  that  the  cause  of  this  enslavement  was  not  yet  entirely  obscured 
is  seen  in  the  Watt  Tyler  rebellion  of  the  fourteenth  century,  where, 
though  the  immediate  inciting  cause  was  a uniform  poll-tax  that  had 
been  levied  upon  all,  the  outbreak  was  really  against  landlordism. 
The  records  of  manor  courts  were  burned  ; they  demanded  the  abo- 
lition of  villainage,  the  restoration  of  common  woods  and  fields, 
and  of  the  crown  lands  that  had  been  alienated  to  favorites.  And 
also  in  the  German  peasants’  rebellion  early  in  the  sixteenth  century, 
when,  among  other  reforms,  they  demanded  that  serfage  should  be 
abolished,  that  game  should  be  free,  that  the  forests  and  commons 
appropriated  by  the  rich  should  be  restored. 

But  with  lapse  of  time  and  the  great  development  of  cities  the 
close  relations  between  man  and  land  seem  to  have  been  altogether  ob- 
scured. There  have  been  popular  outbreaks  again  and  again,  but  with 
no  popular  apprehension  of  the  evil  to  be  remedied.  Men  are  few  in- 
deed who  can,  even  in  a limited  way,  drag  themselves  from  the  customs 
of  their  times. 

Nearly  two  thousand  three  hundred  years  ago  Plato,  deploring  the 
great  inequality  that  separated  the  rich  citizens  from  the  poor  citizens  in 
opposing  camps,  with  resulting  dissension  and  disaster,  made  the  effort 
in  his  ideal  “Republic.”  About  four  hundred  years  ago  another 
famous  essay  was  that  of  Sir  Thomas  More,  in  his  “ Utopia,”  a name 
that  is  now  a synonyme  for  the  impracticable.  Though  himself  rich 
and  titled,  standing  next  the  king  in  authority,  he  says  of  the  govern- 
ments of  his  day,  ‘ ‘ Therefore,  as  I hope  for  mercy,  I can  have  no 
other  notion  of  all  the  other  governments  [he  excepts  Utopia]  that  I 
see  or  know,  than  that  they  are  a conspiracy  of  the  rich,  who  in  pre- 
tence of  managing  the  public  only  pursue  their  private  ends  and  de- 
vise all  the  ways  and  arts  they  can  find  out ; first  that  they  may  with- 
out danger  preserve  all  that  they  have  so  ill  acquired,  and  then  that 
they  may  engage  the  poor  to  toil  and  labor  for  them  at  as  low  rates  as 
possible,  and  oppress  them  as  much  as  they  please.”  This  imagined 
Utopia,  told  of  by  a returned  navigator,  was  an  island  in  the  newly 
discovered  Occident,  and  where  existed  an  order  of  things  quite  dif- 
ferent from  England.  Slavery,  however,  existed  in  Utopia.  More,  it 
seems,  could  not  think  of  a civilized  state  without  that,  though  the 
slaves  were  well  treated.  But  land  was  held  in  common,  and,  in  order 
to  equalize  opportunities,  the  occupants  shifted  every  ten  years.  Lord 
Bacon  later  wrote  his  “ New  Atlantis.”  Then  came  Hobbes’s  “ Levia- 
than,” Harrington’s  “Oceana,”  and  others.  But,  attempted  scien- 


i5 


Japanese  Notions  of  European  Political  Economy. 

tific  explanations  were  not  made  till  about  the  beginning  of  last  cen- 
tury ; and  towards  its  middle,  in  France,  there  arose  a group  of  most 
original  thinkers  under  the  lead  of  Franpois  Quesnay,  physician-in- 
chief  to  the  king.  These  men  “recognized  the  fundamental  relation 
between  land  and  labor  which  had  been  lost  sight  of,  and  arrived  at 
practical  truth  . . . through  a course  of  defectively  expressed  reason- 
ing.’’ “Wealth,”  however,  they  rightly  defined  as  consisting  exclu- 
sively of  material  things  drawn  from  land  by  the  exertion  of  labor  and 
possessing  value  in  exchange  or  exchangeability  (excluding  personal 
qualities  and  skill,  evidences  of  debt,  and,  of  course,  land).  These 
men  saw  that  “ rent,”  or,  as  they  called  it,  “ the  product  net,” — the 
landlord’s  share  (the  landlord  considered  as  a landlord  only), — is  a 
portion  of  the  produced  wealth  really  created  by  the  community,  and 
not  by  the  landlords;  that  it  justly  belongs  to  the  community,  being 
a naturally  provided  fund  for  public  use  ; and  that  taxes  levied  upon 
the  making,  exchanging,  or  possession  of  wealth  should  be  abandoned 
and  recourse  be  had  to  a tax  upon  “rent”  alone, — the  “ Impot 
Unique,” — in  English  the  “ Single  Tax.” 

This  conclusion,  which  after  long  and  patient  study  I now  hold  to 
be  true  and  the  only  remedy  for  enormous  social  evils,  was  by  them 
arrived  at  by  the  faulty  reasoning  that  agriculture  is  the  only  pro- 
ductive employment,  which  after  all  expenses  of  production  are  paid 
leaves  a premium,  or  net  product,  or,  as  we  now  say,  “rent,”  in  the 
hands  of  the  non-producing  landlord,  and  that  mechanical  and  com- 
mercial employments  are  “sterile,”  as,  though  adding  to  the  value  of 
the  things  whose  form  or  place  they  change,  this  added  value  is  only 
that  which  is  consumed  in  the  operations.  Thus  they  overlooked 
altogether  the  product  net,  or  rents,  of  cities,  which,  important  then, 
are  now  in  most  civilized  countries  much  greater  than  the  farming  and 
mining  rents. 

In  reasoning  that  rent  arises  from  the  generative  principle  in 
nature,  and  not  from  competition  for  the  use  of  land  for  all  purposes, 
they  had  established  a treacherous  foundation  that,  in  its  ultimate  fall, 
carried  with  it  their  main  structure,  the  Single  Tax  that  they  had  built 
upon  it. 

In  the  storm  of  the  French  revolution,  and  the  long  wars  that 
ensued,  Quesnay  and  his  fellows  were  forgotten.  But  in  “The 
Wealth  of  Nations,”  printed  first  in  1776,  Adam  Smith,  taking  less 
radical  grounds,  and  treating  land  (illogically)  as  wealth,  had  better 
success.  Although  by  adopting  this  error  his  book  was  received,  he 
necessarily  failed  to  grasp  the  principles  of  true  political  economy  ; 
while  the  great  army  of  writers  from  his  time  until  now,  though 
proud  of  their  “improvements,”  have  been,  with  very  few  excep- 
tions, mere  hair-splitters  of  no  originality  whatever. 

These  attempted  scientific  explanations,  under  the  name  of  political 
economy  or  economics,  being  now  everywhere  taught,  it  will  be  neces- 
sary to  briefly  examine  in  the  effort  to  discover  to  the  Japanese  people 
whether  they  are  in  truth  expositions  of  natural  laws  so  clearly  pre- 
sented as  to  compel  acquiescence,  and  where  upon  the  main  principles,, 
at  least,  there  is  a consensus  of  opinion ; or  whether  the  economics  of 
the  schools,  like  the  Ptolemaic  astronomy  of  the  schools,  in  taking 
some  false  step  in  its  premises,  has  not  been  compelled  to  add  intri- 
cacy to  intricacy  to  a final,  incomprehensible  confusion  of  absurdities. 

Adam  Smith,  author  of  the  tamous  “Wealth  of  Nations,”  pub- 
lished first  in  1776,  and  who  had  in  France  become  personally  known 


1 6 Japanese  Notions  of  European  Political  Economy 

to  Quesnay  and  his  friends,  though  somewhat  indefinite  and  incon- 
sistent as  to  the  nature  of  wealth,  in  his  definition  of  capital  excludes 
land,  and  in  his  chapters  on  taxation  points  out  that  a tax  on  “rent” 
is  a desirable  tax.  and  one  that  cannot  be  shifted  from  landlord  to 
tenant.  “ Ground-rents  are  a still  more  proper  subject  of  taxation.  . . . 
A tax  upon  ground-rents  would  not  raise  the  rents  of  houses.  It  would 
fall  altogether  upon  the  owner  of  the  ground-rent,  who  acts  always  as 
a monopolist,  and  exacts  the  greatest  rent  which  can  be  got  for  the  use 
of  the  ground.”  “Ground-rents  and  the  ordinary  rent  of  land  are, 
therefore,  perhaps,  the  species  of  revenue  which  can  best  bear  to  have 
a peculiar  tax  imposed  upon  them.”  He  frequently  speaks  harshly  of 
landlordism,  declaring  that  “as  soon  as  the  land  of  any  country  has 
all  become  private  property  the  landlords  love  to  reap  where  they  have 
not  sown,  and  demand  a rent  even  for  its  natural  produce”  ; and  that 
in  the  Shetlands,  where  sea-fish  are  so  abundant,  the  landlord’s  rent  is 
determined  not  by  the  productions  of  the  land,  but  by  the  productions 
of  the  sea,  and  that  they  demand  a rent  even  from  gatherers  of  sea- 
weed that  grows  beneath  the  waters  of  the  shore. 

Smith  and  the  writers  who  succeeded  him,  confusing  “land”  with 
“capital”  in  much  of  their  reasoning,  and  misled  by  observing  that 
the  working  masses,  possessing  neither,  underbid  each  other  in  the 
struggle  to  live,  argued  that  “wages”  (the  distributive  share  of  labor 
in  the  joint  production  of  land,  labor,  and  capital)  are  derived  from 
capital,  so  that  no  more  laborers  can  be  employed  than  there  is  capital 
to  employ  them  ; and  that  wages  naturally  tend  to  a minimum  that 
will  give  a bare  living. 

Then  came  the  Rev.  Thomas  R.  Malthus,  who,  in  a pseudo  scien- 
tific treatise,  concludes  that  there  is  a natural  tendency  in  mankind  to 
increase  in  numbers  faster  than  the  food-supply,  and  thus,  wages  being 
limited  by  the  amount  of  capital,  any  increase  in  the  quantity  of  capi- 
tal must  be  followed  by  an  increase  of  laborers,  the  competition  of 
whom  to  get  work  tends  wages  downward  to  a mere  living,  when  further 
increase  of  numbers  is  checked  by  want.* 

Then  came  Ricardo  to  show  that  land  value  (“rent”)  arises  dif- 
ferently from  the  values  of  things  created  by  human  labor,  which  are 
based  upon  the  relative  amounts  of  labor  exerted  in  their  production  ; 
that  land  is  not  produced  at  all,  its  value  developing  altogether  from 
competition  for  its  use,  and  that  rent  is  thus  proportioned  to  the  excess 
of  the  production  of  any  particular  land  over  the  produce  of  land  “ at 
the  margin  of  cultivation,”  which  can  be  had  for  nothing,  or  no  rent. 
Ricardo,  however,  like  most  of  his  predecessors  and  successors,  over- 
looked city  land,  the  most  important  of  all,  notwithstanding  that  its 
rent  is  based  upon  the  same  principle. 

Then  was  developed  what  the  writers  called  “the  law  of  diminish- 
ing returns  in  agriculture,” — that  is,  that  past  a certain  stage  of  pro- 
duction additional  “doses  of  labor,”  as  they  express  it,  bring  propor- 
tionally smaller  and  smaller  and  finally  no  further  returns  at  all. 

Thus  it  seemed  as  if  labor  was  left  without  hope,  and  that  by  the 


* Genesis,  revised  and  improved  by  the  Rev.  Mr.  Malthus:  “Be  fruitful  and 
multiply  and  replenish  the  earth  and  subdue  it.  But  thou  shalst  not  let  thy  multi- 
plication exceed  the  multiplication  of  the  herbs  and  the  living  things  that  shall  be  to 
thee  for  meat,  which  is  by  arithmetic  progression.  Shouldst  thou  get  to  going 
faster,  by  geometric  progression,  thou,  or  some  of  thou,  and  perhaps  most  of  thou, 
wilst  find  thee  in  a fix.” — An  “unedited”  note,  by  Terfmoto. 


Japanese  Notions  of  European  Political  Economy.  17 

very  constitution  of  the  world  and  human  impulses  great  inequality 
must  always  prevail.  The  rich  and  the  poor,  wealth  and  waste,  pov- 
erty and  want  can  never  cease  to  be. 

These  writers  and  the  hosts  who  have  followed  them,  generally 
without  question,  include  in  the  term  wealth  both  land  and  evidences 
of  debt,  and  even  include  labor  by  treating  special  skill,  as  that  of  a 
surgeon,  a preacher,  a linguist,  or  a mechanic,  as  the  “ wealth”  of  these 
men, — their  immaterial  wealth.* 

Here  plainly  is  what  the  logicians  call  a complete  “contradiction 
of  terms.”  Land,  labor,  and  capital  the  essential  primary  factors 
in  the  production  of  wealth ; and  land,  labor,  and  capital  each  in  itself 
treated  as  wealth  ! Personal  skill,  promissory  notes,  and  bonds,  land, 
factory  buildings,  machinery,  money,  etc.,  are,  according  to  these  men, 
all  “wealth,”  and  at  the  same  time  primary  factors  in  the  produc- 
tion of  wealth  ! In  the  physical  sciences  what  would  be  thought  of 
the  professor  who,  after  averring  charcoal,  nitre,  and  saltpetre  to  be 
the  three  primary  and  essential  elements  or  factors  in  the  production 
of  gunpowder,  should  assert  that  nitre  is  not  really  a primary  factor, 
being  composed  of  the  other  two,  that  saltpetre  is  nothing  more  nor 
less  than  nitre,  and  then  treat  each  separately  as  gunpowder  ! f 

Neglecting  their  own  definitions,  and  thinking  of  “ wages”  only  as 
the  amounts  paid  to  hired  laborers  or  mechanics  at  the  end  of  the  week 
or  month  (that  is,  “ some  wages,”  and  not  all  wages),  including  land, 
skill,  bonds,  etc.,  also  in  the  term  capital,  and  thinking  of  returns  to 
capital  as  combined  with  returns  to  labor  as  the  “profits”  of  capital, 
and  thinking  of  interest  not  as  always  the  distributive  share  of  capital, 
or  returns  for  the  use  of  capital,  but  very  generally  as  returns  for  the 
use  of  borrowed  money  only,  and  yet  always  confusing  “rent”  with 
interest,  immense  confusion  grew  into  the  system, — confusion  piled 
upon  confusion  to  the  extreme  of  absurdity. 

To  make  this  more  clearly  seen  I present  the  following  citations 
from  sundry  writers,  but  first  and  principally  from  the  “ Political 
Economy”  of  Arthur  Latham  Perry,  LL.D.,  an  author  of  much  repute, 
and  who,  writing  sixteen  years  ago,  had  not  yet  reached  that  extreme 
of  absurdity  found  in  later  professorial  books,  quotations  from  which, 
I fear,  might  be  received  in  Japan  as  incredible  : 


Perry’s  Political  Economy. — These  extracts  are  from  his  eigh- 
teenth edition,  dated  1881,  and  dedicated  to  John  Bascom,  David  A. 
Wells,  Francis  A.  Walker,  and  William  G.  Sumner,  men  of  the  highest 
standing  in  the  schools. 


“ This  edition  (eighteenth)  has  grown  in  size,  in  symmetry,  and  in 
maturity  of  thought  and  expression.  It  has  been  carefully  revised,  and 
in  large  part  rewritten  once  and  again  and  again,”  but  “ in  nomencla- 


* These  men’s  incomes  are  not  derived  from  capital,  except  in  a limited  way 
from  the  capital  of  their  instruments  or  professional  books.  They  are  derived  from 
labor.  Whether  it  be  by  a weak  man  or  a strong  man,  one  little  skilled  or  much 
skilled,  what  is  exerted  is  labor,  what  results  to  each  is  wages ; wealth,  if  it  is  in 
gold  or  any  material  thing  having  exchange  value  and  drawn  from  land  by  the  exer- 
tion of  labor;  but  otherwise,  no  matter  how  the  individual  may  consider  it,  not 
wealth  (politico-economic  wealth)  even  when  it  is  a formal  written  promise  to  (at 
some  future  time)  transfer  wealth. — Makato. 
f Professor  Perry.  See  pages  19  and  21. 


1 8 Japanese  Notions  of  European  Political  Economy. 

ture,  ...  in  studied  clearness  of  statement  on  every  page,  ...  it  is 
the  same  book  still.”  (Preface,  p.  vii.) 

“A  science  is  a body  of  exact  definitions.”  A definition,  he  says, 
must  be  so  exact  that  “the  class  must  be  perfectly  separated,  in  the 
mind  by  the  conception  and  in  the  words  by  the  definition,  from  all 
other  classes.  The  class  as  defined  must  include  everything  that  has 
the  quality  for  the  sake  of  which  the  investigation  is  had.  There  can 
be  no  ragged  edges”*  (p.  89). 

“ What  is  established  in  respect  ...  to  a part  may  be  . . . affirmed 
. . . of  the  whole”  (91). 

Political  economy,  he  says,  “is  the  science  of  sales  or  exchanges. 
Anything  whatsoever  that  is  salable,  or  can  be  made  so,  comes  within 
its  view,  and  scientifically  it  cares  nothing  whatever  for  anything  else’  ’ 
(96).  “We  place  the  field  of  the  science  just  where  Whately  places 
it, — ‘ Catallactics,  or  the  science  of  exchanges' ; just  where  the  continental 
Kiehl  puts  it, — ‘ Die  Lehre  von  der  Werthen'  ( the  doctrme  of  values')-, 
and  just  where  Macleod  locates  it,  though  we  do  not  like  the  term 
‘ quantities’  in  this  connection, — ‘ The  science  which  treats  of  the  laws 
which  govern  the  relations  of  exchangeable  quantities'  " (112). 

Finding  that  no  other  writer  has  satisfactorily  defined  wealth,  and 
unable  himself  to  fix  its  bounds,  he  declares  “ that  a chief  reason  of 
the  slow  progress  of  the  science  hitherto  has  been,  that  it  has  tried  to 
use  a word  for  scientific  purposes  which  no  amount  of  definition  and 
explanation  and  manipulation  could  make  suitable  for  that  service” 
(99).  He  then  proposes  that  the  word  “property”  shall  take  its 
place. 

“ The  three  requisites  of  production”  (production,  be  it  noted, 
not  of  “wealth,”  but  of  “property,”  that  is,  land,  slaves,  govern- 
ment bonds)  “are,  first,  ‘Natural  agents’;  . . . second,  labor;  . . . 
and  third,  capital.  . . . These  three  conspire  in  all  production” 
(167).  Note  that  he  here  uses  “ natural  agents”  in  place  of  “ land,” 
in  order,  later,  to  treat  land  as  capital,  apart  from  natural  agents. 
He  nowhere  explains  how  these  natural  agents  can  be  used  apart  from 
land. 


Labor,  “the  factor  of  first  importance,”  he  defines  to  be  “per- 
sonal effort  of  any  kind,  put  forth  in  view  of  a return  service  and  for 
sake  of  it.”  “ Effort  that  is  not  sold  is  not  labor”  (204).  . Which 
definition  excludes  labor  expended  in  producing  things  to  be  con- 
sumed directly  by  the  laborer.  “The  wise  laborer  is  he  who  . . . 
makes  himself  necessary  to  his  employer.  . . . That  laborer  will  be  the 
last  one  discharged”  (210).  By  laborer  he  here  means  only  the  hired 
laborers,  and  unconsciously  changes  the  economic  meaning  of  labor 
from  all  human  exertion  in  the  production  of  wealth  to  some  human 
exertion  in  the  production  of  wealth. 

“ The  value  of  labor  is  controlled  by  the  grand  law  of  supply  and 
demand.”  “ Other  influences  on  wages  are  secondary  at  best”  (250). 
In  California,  in  1849,  wages  for  common  labor  rose  to  an  ounce  (six- 
teen dollars)  a day.  Now,  with  a superabundance  of  capital  (indi- 
cated by  the  comparatively  low  rate  ot  interest),  which  he  argues  creates 
demand  for  labor,  the  same  class  are  paid  one  dollar  and  twenty- five 
cents.  “ The  more  capital  the  higher  the  rate  of  wages”  (273). 


* Compare  with  J.  Shields  Nicholson,  Professor  of  Political  Economy  in  the 
University  of  Edinburgh,  page  27,  or  Bonamy  Price,  page  32. — Makato. 


Japanese  Notions  of  European  Political  Economy.  i g 

“The  demand  for  labor  . . . cannot  be  unlimited”  (225).  As 
societies  are  .composed  of  men  all  of  whom  want  more  things  and  are 
at  the  same  time  capable  of  producing  things,  is  not  this  unlimited 
demand  for  the  wealth  that  can  be  brought  forth  only  by  labor  ? And 
is  not  this  unlimited  demand  for  wealth  associated  with  a supply  limited 
only  by  human  ability  to  produce  ? 

“ Wages,  therefore,  cannot  rise  indefinitely”  (221;).  Why  not  ? 
Man’s  inventive  power  is  practically  unlimited.  His  ability  to  pro- 
duce wealth  constantly  grows.  If  his  wages  do  not,  there  is,  evi- 
dently, some  intercepting  robber. 

Perry  treats  of  labor  only  in  connection  with  the  factor  capital, 
leaving  out  the  factor  land.  For  example,  “In  this  country,  where 
there  is  nothing  to  hinder  any  laborer  from  becoming  a ‘ capitalist  ’ ” 
(247).  “ So  long  as  capital  and  labor  rest  solely  upon  their  natural 

rights,  neither  can  have  the  advantage  of  each  other”  (247).  “ Capi- 

tal ..  . has  intimate  relations  with  wages,  and  the  two  are  not  antago- 
nistic.” “The  production  of  most  material  bodies  is  a joint  process, 
in  which  capital  and  labor  both  conspire”  (243).  “ Capitalists  are 

under  no  obligation  to  employ  laborers  at  any  time”  (237).  “Wages 
are  paid  out  of  the  joint  products  of  the  employer’s  capital  and  the 
laborer’s  industry”  (231),  etc.,  etc.,  etc. 

He  says,  “ Strikes  are  contrary  to  the  very  old  adage,  that  it  takes 
two  to  make  a bargain”  (241).  “But  let  the  bargain  always  be 
free”(24i).  “ If  one  party,  who  happens  to  have  the  power  to  do  it, 

uses  anything  like  compulsion  upon  the  other,  it  ceases  so  far  forth  to 
be  a bargain  at  all,  and  becomes  a sort  of  robbery”  (241).  And  yet, 
as  things  are  now  organized,  we  can  so  easily  see,  in  the  matter  of 
wages,  that  three  make  the  bargain,- — to  wit,  one  employer  who  needs 
one  man,  and  two  men  who  need  employment. 


“The  second  grand  requisite  of  production  is  capital.”  “ But  it 
is  not  an  original  element,  because  it  is  of  itself  a product  of  the  other 
two  factors”  (251).  But  later  on  he  writes  “Land  is  capital” 
(298). 

He  defines  capital  as  “anything  valuable  outside  of  man  him- 
self which  becomes  a means  of  further  produce”  (252).  “We  are 
willing  to  take  the  risks  with  this  definition”  (252).  Thus,  after  de- 
claring that  a definition  must  be  so  exact  as  to  clearly  and  without 
“ragged  edges”  separate  the  thing  defined  from  all  other  things,  he 
hopelessly  confuses  the  boundary  between  capital  and  land. 

“And  it  is  because  capital  brings  gratuitous  natural  forces  into 
service,”  etc.  (256).  The  rainfall,  sunlight,  air,  winds,  electricity, 
gravitation  (natural  forces),  how  can  they  be  “brought  into  service” 
except  on  land  ? The  term  land  includes  them  all. 

“ The  reward  of  capital  is  technically  ‘profits’  ” (260).  And  yet 
he  subdivides  profits  into  wages  of  superintendence,  interest,  and 
compensation  for  risk.  Thus  the  distributive  shares  of  landlord, 
laborer,  and  capitalist — to  wit,  rent,  wages,  and  interest— do  not 
correlate.  For,  though  he  gives  wages  to  labor,  he  includes,  besides 
interest,  wages  also  in  the  capitalist’s  share  (wages  of  superintendence) 
and  also  “rent,”  inasmuch  as  he  declares  land  to  be  capital.  As  to 
‘ ‘ compensation  for  risk’  ’ it  has  no  place  whatever,  as  risk  is  eliminated 
when  all  the  transactions  of  a community  are  taken  together. 

“Capitalists  are  the  principal  people  who  desire  steadily,  and  are 


20  Japanese  Notions  of  European  Political  Economy. 

able  to  pay  for.  the  service  of  laborers”  (2*6).  “ The  sole  sources  ot 

riches”  (Perry  objects  to  the  term  wealth)  “and  taxes  is  trade”  (600). 
Note  that  he  includes  “land,”  that  is,  the  world, — the  universe, — in 
the  term  “ riches.” 

“Laborers  are  every  way  the  economical  equals  of  capitalists. 
Laborers  offer  a service  to  capitalists,  and  capitalists  offer  a service  to 
laborers.  They  stand  man  to  man  to  the  mutual  advantage  of  both, 
and  one  is  as  independent  as  the  other”  (267).  “As  a capitalist,  he 
cannot  exist  without  them  ; as  laborers,  they  cannot  exist  without 
him”  (267).  In  all  this  landlords  are  omitted, — the  men  “owning” 
the  whole  field  of  labor, — the  world, — with  legal  power  to  lock  out 
their  landless  fellows. 

“All  that  is  produced  is  to  be  divided  ; if  more  is  produced,  more 
is  to  be  divided”  (269).  Yes,  but  how  divided?  By  including  land 
in  the  term  capital  and  “rent”  in  the  term  “interest,”  he  fails  to  see 
that  during  the  past  one  hundred  years,  while  interest  has  declined, 
rent  has  enormously  advanced. 

“ Profits  and  wages  are  reciprocally  the  leavings  of  each  other,  since 
the  aggregate  products  created  by  the  joint  agency  of  capital  and 
labor”  (omits  land  again)  “are  wholly  to  be  divided  between  them. 
This  demonstration  is  extremely  important,  as  it  proves  beyond  a cavil, 
that  the  value  of  labor  tends  constantly  to  rise,  . . . and  therefore 
that  there  is  inwrought  in  the  very  nature  of  things  a tendency  towards 
equality  of  condition  among  men.  God  has  ordered  it  so”  (270).  It 
has  been  so  ordered,  no  doubt ; but  God  does  not  keep  men  in  leading- 
strings.  The  moral  laws,  like  the  physical,  are  left  to  man  to  dis- 
cover. Any  other  system  apparently  would  maintain  men  in  babyhood. 
Yet  among  primitive  men  we  observe  a full  equality  of  opportunity, 
and  a fair  equality  of  condition.  If  starvation  exists  in  an  Indian  tribe, 
it  is  because  there  is  a real  scarcity  of  food,  equally  affecting  all. 
Why,  if  God  ordains  equality,  has  advancing  civilization  always  brought 
greater  and  greater  inequality,  often  ending  in  an  overthrow  of  the 
civilization  and  a lapse  into  barbarism?  Spectres  of  ruined  cities  and 
departed  empire,  though  silent,  are  admonitory. 

“All  capital  is  products  saved  for  further  use  in  production” 
(273).  Land  being  included  in  capital  is  thus  a product  saved  for 
use  in  further  production  ! 

“ Profits  are  the  leavings  of  wages”  (273).  But,  as  I have  shown, 
he  includes  wages  also  in  profits  (wages  of  superintendence). 


“It  is  conceded  by  all  that  air  and  light  and  gravity  and  elec- 
tricity and  other  natural  powers,  disconnected  with  the  land” 
(bold-face  type  mine),  “ are  free  for  all  to  use  at  will”  (274).  Maybe, 
if  found  disconnected.  But  is  it  possible  to  conceive  of  them  as  so 
disconnected  ? Can  any  of  them  be  used  apart  from  land  ? To  ask 
these  questions  is  to  answer  them. 

“The  questions  relating  to  land  and  its  products  have  been 
among  the  most  vexed  questions  in  political  economy,  have  exercised 
a vast  amount  of  ingenuity,  and  have  led  to  careful  observations  in  the 
whole  field  of  agriculture”  (275).  He  thinks  that  his  “previous 
definitions  and  classifications  apply  here  without  a break”  (275). 

Of  landlords  he  writes,  “ What  they  received  gratuitously  they 
must  gratuitously  transmit”  (278).  (He  infers  here  that  they  can  de- 
mand a price  for  improvements  alone.)  “ But  if  they  go  farther,  and 


Japanese  Notions  of  European  Political  Economy.  2 1 

demand  pay  for  the  natural  qualities  of  the  soil  which  God  gave  and 
they  have  not  improved,  for  the  sun  that  shines  and  the  rain  that  falls 
on  it,  the  demand  is  blocked  at  once  by  the  common  sense  of  the  pur- 
chaser. ...  I cannot  give  you  something  for  that  which  costs  you 
nothing,  and  which  I can  get  for  nothing”  (278).  The  light  and 
frontage  of  a corner  lot,  the  natural  fertility  of  soil  and  mild  climate 
of  California,  are  they  not  sold  ? 

“ Human  motives  are  such,  and  everything  is  so  providentially  ar- 
ranged, that  we  cannot,  as  a rule,  sell  God’s  gifts;  it  would  be  derog- 
atory to  the  Giver  if  we  could”  (279).  Is  not  man’s  freedom  God’s 
gift?  And  is  not  the  earth  God’s  gift  ? Have  not  both  been  sold? 

“ Whatever  makes  land  more  an  object  of  desire  than  it  was  before, 
whether  increased  fertility  or  a location  now  become  more  ad- 
vantageous, will  so  far  forth  increase  its  value”  (281). 

“There  are  no  such  powers”  (indestructible  powers  of  the  soil), 
“and  even  if  there  were,  their  value  could  not  be  separated  from  the 
value  created  by  labor  and  capital  expended  upon  it”  (280). 

“ Lands  in  cities  or  in  the  neighborhood  of  them,  lands  of  unusual 
fertility  or  possessing  superior  building  sites,  lands  containing  rich 
mines  or  a remarkable  water-power,  sometimes  excite  an  extraordinary 
desire  to  possess  them  and  bear  in  consequence  an  extraordinary 
price”  (281). 

“Still,  the  efforts,  care,  and  abstinence  of  their  owners,  or  of 
others,  have  made  up  the  essential  part  of  their  present  utility” 
(bold-face  type  mine)  (282). 

“ Land  may  be  purchased  and  held  a long  time  with  a view  to  ulti- 
mate profit.  . . . Little  may  have  been  done  for  the  land  originally, 
and  little  in  the  mean  time,  and  yet  the  ultimate  price  be  large,  because 
the  purchase-money  should  be  replaced  with  compound  in- 
terest” (bold-face  type  mine)  (282).  Loss  from  declining  land  values 
ought,  then,  justly  to  be  made  good  by  the  state.  And  should  capital, 
in  the  form  of  factory  buildings  and  machinery,  or  a grocer’s  stock,  be 
allowed  by  their  owners  to  stand  ten,  twenty,  forty  years  totally  un- 
touched, there  would  remain,  I fear,  instead  of  the  original  cost  with 
interest  added,  little  more  than  rust,  dust,  and  decaying  walls. 

“ Abstinence,  therefore,  which  is  one  form  of  effort,  has  often  to 
do  with  the  value  of  land”  (282). 

“This  brings  us  to  the  very  important  proposition  that  by  much 
the  largest  part  of  all  salable  land  is  nothing  more  nor  less  than  capital’  ’ 

(283)‘ 

“The  moment  it  is  recognized  as  such,*  the  difficulties  that  have 
perplexed  economists  and  statesmen — for  example,  Mr.  George,  in  his 
labored  discussion  of  land,  and  Mr.  Gladstone  in  his  Irish  Land  Bill — 
mostly,  if  not  wholly,  disappear”  (283). 

“That  portion  of  the  land  that  is  capital,  then,  must,  of  course, 
possess  all  the  characteristics  of  capital,  and  among  these  is  the  lia- 
bility to  wear  out”  (284).  This  shows,  I think,  that  he  confuses 
improvements  with  land,  and  is  really,  though  unconsciously,  defend- 
ing property  in  improvements  (property  in  wealth),  and  not  property  in 
land. 

He  speaks  of  whole  tiers  of  farms  in  New  Hampshire  that  have 


* The  writers  before  him,  similarly  confused,  Perry  overlooks.  Even  Adam 
Smith,  though  omitting  land  from  his  definition  of  capital,  seems,  at  times,  in  his 
arguments  to  include  it  both  in  capital  and  wealth. — Makato. 


22  Japanese  Notions  of  European  Political  Economy. 

fallen  in  value,  and  such  facts,  he  thinks,  “should  shut  the  mouths  of 
Henry  George  and  the  Irish  Land  Leaguers”  (284).  But  are  not  the 
owners  of  these  farms  entitled  “to  their  purchase-money  back  with 
compound  interest”  ? (282).  The  values  of  lands  in  Babylon  and  the 
plains  about  it  have  also  declined  in  value,  and  perhaps  to  zero.  The 
reason  is  manifest, — the  owners  now,  there  being  no  inhabitants,  can 
exact  no  “ rent.” 

“The  truth  is  that  the  common  sense  of  mankind  seals  such 
ownership”  (284).  Common  sense  may  sometimes  mean  long-con- 
tinued custom  that  has  utterly  fettered  thought,  and  reminds  one  of  the 
Duke  of  Argyle’s  paragraph  in  assaulting  Henry  George  : “ I know- 
very  well,  whether  I can  unravel  his  fallacies  or  not,  he  is  talking  the 
most  arrant  nonsense,  and  must  have  in  his  composition,  however  in- 
genious and  however  eloquent,  a rich  combination  and  a very  large 
percentage  of  the  fanatic  and  goose.”  (“The  Prophet  of  San  Fran- 
cisco,” Nineteenth  Century,  April,  1884.) 

“The  rent  of  leased  land  is  the  measure  of  the  service  which  the 
owner  of  the  land  thereby  renders  to  the  actual  cultivator  of  it” 
(288).  The  word  “thereby”  in  this  sentence  can  refer  only  to  the 
word  “rent”  preceding.  And  consequently  the  service  rendered  to 
the  cultivator  by  the  owner  is  to  carry  off  a part  of  the  cultivator’s 
produce  as  rent. 

“ The  rent  of  land  does  not  differ  essentially  in  its  nature  from  the 
rent  of  buildings  in  cities,  or  from  the  interest  of  money”  (288). 
He  here  thinks  of  interest  as  returns  for  borrowed  money  only,  and 
not  as  the  distributive  share  of  capital. 

“It  is  also  in  strict  accordance  with  right  that  the  legal  owner 
should  continue  to  receive  a return  in  the  shape  of  rent  * for  all  the  fer- 
tility and  opportunity  actually  rented  by  him,  and  no  more”  (290). 

All  through  his  book  “tillable  lands,”  “diversity  of  soils,”  “su- 
perior crops,”  “increased  fertility,”  “ law  of  diminishing  returns  in 
agriculture,”  “ improvements  in  cultivation,” — “the  questions  relating 
to  land  . . . have  led  to  . . . observations  in  the  whole  field  of  agri- 
culture,” and  so  on,  again  and  again,  show  that  by  “ land”  he  is  think- 
ing usually  of  farm  lands. 

“The  best  tenure  of  .lands  is  the  fee  simple  in  the  hands  of  the 
actual  cultivator”  (293).  The  census  reports  of  1880  and  1890  show 
that  tenancy,  both  in  city  and  country,  is  steadily  increasing. f 

The  word  “ farm”  in  the  United  States  has  quite  a different  mean- 
ing from  the  same  word  used  in  Great  Britain.  It  means  here  a man 
cultivating  his  own  fields  in  his  own  way,  and  it  means  there  a man 
cultivating  another’s  fields  with  his  own  funds  in  a way  and  on  terms 
made  a matter  of  contract  between  the  two.  And  these  two  modes  of 
culture  are  so  distinct  that  they  are  not  likely  to  lie  alongside  of  each 


x Why  does  he  not  say  interest,  as  above  suggested  ? — Makato. 
f The  census  reports  of  1880  and  1890  show  that  in  ten  years  farm  tenancy  has 
grown  in  Iowa  from  about  twenty-four  per  cent,  to  twenty-nine  and  one-half  per  cent. , 
in  New  Jersey,  from  twenty-four  and  one-half  per  cent,  to  thirty-two  per  cent. ; in  Mas- 
sachusetts, from  eight  to  fifteen  per  cent.;  in  Maryland,  from  thirty-one  to  thirty-seven 
and  one-fourth  per  cent. ; in  Kansas,  from  thirteen  to  thirty-three  per  cent. ; in  Ohio, 
from  twenty-five  to  thirty-seven  per  cent.;  and  that  city  tenancy  in  1890  was  in  Boston 
eighty-one  and  one-half  per  cent. ; in  Baltimore,  seventy-four  per  cent.;  in  Pittsburg, 
seventy-three  per  cent. ; in  Kansas  City,  seventy-seven  per  cent. ; in  Philadelphia, 
seventy-seven  per  cent. ; in  New  York  City,  ninety-four  per  cent.  ; and  in  these  cities 
one-third  to  one-half  of  the  comparatively  few  home-owners  are  mortgaged. 

— Makato. 


Japanese  Notions  of  European  Political  Economy.  23 

other  in  the  same  country  to  any  great  extent  for  a very  long  time’  ’ 
(293)- 

“ In  this  country  the  plough  is  guided  almost  exclusively  by  the 
man  who  owns  the  soil”  (293).  This  is  not  in  accord  with  census 
reports.  Besides,  he  forgets  the  landless  farm  laborers. 

“ The  lands  naturally  fall  into  those  hands  which  are  most  capable 
of  using  them  productively,  because  such  persons  can  afford  to  pay 
more  for  them  than  anybody  else”  (294).  But  the  tenants  are  every- 
where the  ones  who  use  them  productively.  The  landlords’  lapabili- 
ties  are  confined  to  raising  and  collecting  the  rents. 

“ It  would  seem  that  the  masses  of  men  are  educated  and  developed 
by  nothing  so  much,  at  least  by  nothing  more,  as  and  than  by  the 
ownership  of  land”  (294).  The  institution  of  the  “single  tax,”  by 
which  landlessness  is  abolished,  each  member  of  the  community  having 
precisely  the  same  rights  in  the  lands  of  the  community  as  every  other 
member,  then  would  tend  greatly  to  this  “ education  and  develop- 
ment.” 

“ The  institution  of  slavery  led  to  the  system  of  large  plantations” 
(295).  This  is  what  Americans  call  “putting  the  cart  before  the 
horse.”  It  was  the  large  landed  estates  granted  by  Spanish  and 
English  kings  that  led  to  the  introduction  of  slavery. 

“ No  degree  of  merit  in  the  other  parts  of  the  British  system  can 
ever  compensate  the  want  of  just  and  broadly  liberal  views  of  land’  ’ 
(298).  The  land  tenure  of  Great  Britain  is  the  same  as  in  the  United 
States,  except  that  the  British  landlords’  powers  have  been  somewhat 
checked  by  acts  of  Parliament. 

“The  questions  of  land  test  the  powers  of  the  economist  to  the 
utmost”  (298). 

“Land  is  a commodity  made  such  by  human  effort”  (298). 

“ Private  property  in  land  is  a dictate  of  the  deepest  justice  and  of 
the  largest  experience”  (298). 

“The  rent  of  leased  land  is  but  a return  service  of  the  cultivator 
for  the  use  of  the  capital  of  the  land-owner”  (299). 

“ Superior  soils  pay  a rent  because  the  price  of  produce  justifies  the 
cultivation  of  inferior  soils”  (299). 

“ But  is  not  rent  a return  for  a service  rendered?  And  if  the  rent 
be  confiscated  would  the  service  continue  to  be  rendered  ?”  (86).  That 
is,  if  rents  should  be  collected,  not  for  private  but  for  public  use ; if 
landlords  should  not  be  permitted  to  let  out  the  world,  would  there  be 
a world  to  use  ? 

“ The  price  of  produce  (in  this  term  Perry  includes  land,  which 
he  says  is  produced),  as  of  everything  else,  is  determined  by  the 
demand  for  it  and  the  supply  of  it”  (299).  As  in  “products”  he 
includes  not  only  true  wealth,  but  also  land  (or  the  universe  outside  of 
man)  evidences  of  debt,  skill,  what  can  he  mean  by  “ everything  else”  ? 

“As  lands  are  capital,  so  rents  are  profits”  (299),  and  “profits,” 
he  has  said,  are  resolvable  into  wages,  interest,  and  compensation  for 
risk. 

“An  uncommonly  competent  critic  (see  Nation , ii,  146)  conceded, 
on  the  appearance  of  the  first  edition  of  this  book,  that  original  light 
was  thrown  upon  the  vexed  question  of  land”  (p.  ix).  So  Perry  is 
not  to  be  wondered  at,  because,  like  all  of  his  compeers,  he  does  noth- 
ing more  than  to  put  in  pseudo-scientific  shape  the  popular  beliefs, 
customs,  and  prejudices  of  his  age.  Rare,  indeed,  is  the  mind  that 
they  do  not  fetter. 


24  Japanese  Notions  of  European  Political  Economy. 

I confess  that  upon  re-reading  these  extracts  from  Perry,  in  which, 
priding  himself  upon  his  logic,  he  violates  every  logical  rule  and  falls 
into  every  fallacy  ; noting  his  confusions  and  overlapping  definitions, 
his  substitution  of  the  term  property  for  the  term  wealth,  and  his 
varied  absurd  reasons  for  the  private  appropriation  of  rent,  there  comes 
over  me  a feeling  of  shame  that  custom  can  so  degrade  the  intellect  of 
man. 


E.  Benjamin  Andrews,  formerly  professor  of  political  economy  at 
Cornell  University,  until  lately  president  of  Brown  University,  and 
who  has  just  accepted  the  superintendency  of  the  Chicago  Public 
Schools,  is  a man  widely  known  and  of  the  highest  reputation.  He 
seems  to  have  an  open  mind  and  to  have  grown  in  stature.  His  book 
was  written  after  a long  course  of  linguistic  study  and  attempts  to 
comprehend  the  incomprehensible  German  and  Italian  as  well  as 
English  “economists,”  in  which,  for  the  time,  he  lost  his  mental 
grasp  ; for  these  works  “ so  cause  the  mind  vainly  to  torment  itself  in 
the  effort  to  discover  their  meaning  that  at  last  it  collapses  exhausted, 
with  its  capacity  for  thinking  completely  destroyed.”  His  book, 
though  less  absurd  than  Perry’s,  is  seemingly  an  assurance  that  there 
still  is  truth  in  the  assertion  of  Adam  Smith  about  the  universities  of 
his  time,  the  greater  part  of  which  have  not  been  forward  to  adopt 
improvements,  and  are  “sanctuaries  in  which  exploded  systems  and 
obsolete  prejudices  have  found  shelter  and  protection  after  they  have 
been  hunted  out  of  every  other  corner  of  the  world.” 

This  compendium  was  published  first  in  1888,  and  is  yet  largely 
used.  The  schoolman,  as  usual,  shows  all  over  it.  It  is  entitled 
“Institutes  of  Economics,”  and  is  by  “Elisha  Benjamin  Andrews, 
D.D.,  LL.D.,  President  of  Brown  University  and  late  Professor  of 
Political  Economy  and  Finance  in  Cornell  University.”  It  is  dedi- 
cated “To  Hof-Rath  Dr.  John  A.  R.  Von  Helferich,  Professor  of 
Economics  and  Finance  in  the  University  of  Munich,  by  his  former 
pupil,  the  author.”  On  the  back  of  the  title-page  is  a quotation  of 
four  lines  from  Xenophon,  in  the  Greek  original,  without  an  accom- 
panying translation.  Of  independent  thought  there  is  apparently 
little.  The  author  rests  mainly  upon  authorities,  to  whom  he  con- 
stantly refers.  The  first  chapter,  “Economics  Defined,”  is  headed 
with  these:  Cossa,  Guide,  ch.  i.  Mill,  Essays,  1829,  on  Method  in 
Pol.  Ec.  Sidgwick,  on  do.,  Fortnightly,  1879.  Roscher,  Grundlagen, 
Einl.,  ch.  i.  Cohn,  Grundlegung,  Einl.,  chaps,  i,  ii,  iv.  Gamier , 
Traite  d' econ.  pol.,  682-85.  . 

The  second  chapter,  “General  and  Private  Wealth,”  is  headed 
with  Storch,  Zur  Kritik  d.  Begr.  von  Nationalreichthum  (1827).  Mar- 
shall, Economics  of  Industry,  § 7.  Hawley,  Quar.  Jour.  Econ.,  vol. 
ii,  365,  599.  Inama-Sternegg,  Vom  National- Reichthum,  Deutsche 
Rundschau,  June,  1883.  Neumann- Spallart,  Weltwirtschaft,  Jahrb., 
1883-84,  pp.  8 ff.  Schmoller-Forschungen,  vii. 

From  his  preface  I read,  “ As  economics  is  now  in  transition 
(bold- face  type  mine),  many  deprecate  all  effort  at  present  to  summarize 
it  afresh”  (p.  vi).  Modification  or  improvement  he  probably  means. 
“Transition,”  suggestive  of  a greater  or  complete  change,  as  from 
infirmity  to  death,  is,  I think,  the  unintended  expression  of  a truth. 

“ Meantime  our  best  texts,  with  all  that  is  true,  profound,  and 
well  said  in  them,  blend  not  a few  propositions  that  what  may  be 
called  the  general  judgment  of  progressive  economists  pronounces 


Japanese  Notions  of  European  Political  Economy.  25 

inadequate,  misleading,  or  erroneous.  Such  are  especially  nu- 
merous in  regard  to  the  nature  of  wealth,  the  scope  of  econo- 
mics, and  in  the  weighty  rubrics  of  Value,  Money,  Interest, 
Wages,  and  Profits”  (all  bold-face  type  mine),  (vi).  That  is,  they 
(“  our  best  texts”)  are  at  sea  not  only  upon  the  very  foundation  prin- 
ciples of  political  economy,  but  even  as  to  its  scope  ! 

“Economics  is  that  branch  of  learning  conversant  about  general 
wealth.”  Might  not  statistics  or  “ finance”  also  be  “ conversant  about 
general  wealth”  ? Besides,  as  “ our  best  texts”  disagree  as  to  the  nature 
of  wealth,  economics  is  conversant  about  something  not  yet  defined. 

“ Wealth,”  Andrews  says,  “ being  the  collective  name  for  all  those 
categories  of  things,  powers,  relations,  and  influences  which  both  result 
from  conscious  human  effort  and  directly  contribute  to  human  welfare 
in  its  temporal  aspect  (1).  “ Categories  of”  sounds  learned,  but 

should  be  omitted.  And  the  “things,  powers,  relations,  and  influ- 
ences” may,  by  this  definition,  have  no  value  in  exchange  (as  required 
by  other  definitions)  and  yet  be  “ wealth.” 

“ Capital  is  the  name  of  all  products,  material  or  immaterial 
(bold-face  type  mine)  which  are  engaged  in  or  devoted  to  the  mission  of 
helping  labor  to  create  further  products.  It  is  thus  one  great  depart- 
ment of  wealth”  (47).  Roscher  has  well  classified  the  various  forms 
of  capital  as  follows  (omits  land,  but  includes  “incorporeal  or  imma- 
terial capital”  which  is  not  defined,  but  probably  refers  to  skill,  as  of 
mechanics,  physicians,  and  so  on, — that  is,  to  skilled  labor,  or  prop- 
erly labor,  which  cannot  be  capital  at  all). 

“ Ground-rent  is  the  advantage  accruing  to  land-owners  from  the 
use  (bold-face  type  mine)  of  certain  uncreated  or  socially  created 
powers  and  utilities  connected  with  land,  including,  besides  mere  fer- 
tility of  soil,  also  mineral  wealth,  water  privileges,  location,  etc.” 
(166). 

“Rent  forms  no  part  of  the  cost  of  production,  and  is  payable 
for  no  service.  It  swells  the  individual  fortunes  only  at  the 
expense  of  society  as  a whole.  . . . Rent  does  not  cause  higher 
prices,  but  is  caused  by  them  (bold-face  type  mine),  (165).  * 

He  includes  in  the  term  “ wages”  the  reward  of  common,  unskilled 
labor  only.  The  rewards  (salaries  or  fees)  earned  by  “ peculiar  talents’  ’ 
are  profits.  He  distributes  the  produced  wealth  into  rent,  interest, 
wages,  and  profits,  four  portions  which  do  not  correlate  with  the  factors 
land,  labor,  and  capital. 


Alfred  Marshall,  Professor  of  Political  Economy  in  the  Univer- 
sity of  Cambridge,  Fellow  of  St.  John’s  College,  and  sometime  Fellow 
of  Baliol  College,  Oxford,  occupies  the  first  rank,  “ beyond  all  ques- 
tion,” says  Cossa,  the  eminent  Italian  economist. 

Marshall  defines  “ political  economy  or  economics’  ’f  to  be  a “study 
of  man’s  actions  in  the  ordinary  business  of  life  ; it  inquires  how  he 
gets  his  income  and  how  he.  uses  it.  Thus,  it  is  on  one  side  a study 
of  wealth,  and  on  the  other,  a more  important  side,  a part  of  the  study 
of  man.”  I fear  that  Japanese  students  may  regard  this  as  an  ironical 
production  of  my  own.  However,  it  can  be  readily  verified  by  turning 
to  page  1 of  his  book. 

Verbose  incomprehensibility  characterizes  Marshall,  a style  caused 


* Compare  the  lines  in  bold-face  type  with  Perry  on  the  same  subject,  ante. 
f In  his  “ Principles  of  Economics,”  1891. 


26  Japanese  Notions  of  European  Political  Economy. 

not  only  by  his  confusion  of  mind,  but  by  his  scholastic  neglect  of  the 
English  tongue  for  Latin,  Greek,  German,  Italian,  and  French,  and 
also  by  a mathematical  turn,  inducing  him  to  still  more  mystify  both 
himself  and  his  readers  by  abstruse  geometric  and  algebraic  proofs. 

Commencing  on  page  126  are  thirteen  pages  devoted  to  capital, 
but  that  cannot  be  understood.  They  deal  with  “social  capital,  trade 
capital,  consumption  capital,  auxiliary  capital,  potential  capital,  circu- 
lating capital,  fixed  capital,  specialized  capital,  personal  capital.”  Of 
personal  capital  he  says,  “ We  might  slightly  modify  Adam  Smith’s 
phrases  and  say  that  individual  capital  is  that  portion  of  the  person’s 
external  goods  by  which  he  obtains  a livelihood  (Erwertsmittel).” 

Four  pages,  commencing  at  116,  are  given  to  “Labor,”  which  he 
defines,  “ As  any  exertion  of  mind  or  body  undergone,  partly  or  wholly, 
with  a view  to  some  good  other  than  the  pleasure  derived  directly  from 
the  work.” 

Like  his  compeers,  he  refers  constantly  to  soil,  fertility,  crops,  and 
so  on,  taking  but  an  agricultural  view  of  land.  It  seems  never  to  occur 
to  him  to  ask,  “ Besides  cabbages  and  corn,  other  things  produced  by 
human  effort  are  produced — where  ?’  ’ 

“The  requisites  of  production,”  he  writes,  “are  commonly  spoken 
of  as  land,  labor,  and  capital : those  material  things  which  owe  their 
usefulness  to  human  labor  being  classed  under  capital  and  those  which 
owe  nothing  to  it  being  classed  under  land.  The  distinction  is  obvi- 
ously a loose  one ; for  bricks  are  but  pieces  of  earth  slightly  worked 
up,  and  the  soil  of  old  settled  countries  has  for  the  greater  part  been 
worked  over  many  times  by  man.  and  owes  to  him  its  present  form” 
(191).  This  extreme  confusion  runs  through  all  recent  writers.  They 
cannot  separate  man’s  works  from  God’s.  Can’t  distinguish  a brick 
from  a clay  bed  ! And  as  to  farm  lands  and  all  other  lands,  what 
gives  value,  and  sometimes  high  value,  to  lands  in  new  settlements  ? 
Manifestly  the  presence,  or  the  anticipated  presence,  of  a large  popu- 
lation. Not  that  they  “ have  been  worked  over  many  times.” 

He  devotes  many  pages  to  “ Diminishing  Returns  in  Agriculture” 
and  “Doses  of  Labor,”  not  noting  that  all  extended  production,  whether 
of  beans  or  books,  pottery  or  penknives,  hay  or  houses,  must  ulti- 
mately require  an  extension  of  space. 

I doubt  that  it  is  possible  to  discover  what  Marshall  means  by  “ law.” 

He  makes,  in  thirty-two  pages,  without  coming  to  positive  conclu- 
sion, “A  preliminary  survey  of  Distribution  and  Exchange,”  erro- 
neously, I think,  treating  “exchange”  under  the  head  of  “distribu- 
tion” instead  of  “production,”  for  “it  is  by  exchange  and  through 
exchange  that  man  obtains  and  is  able  to  exert  the  power  of  coopera- 
tion which,  with  the  advance  of  civilization,  so  enormously  increases 
his  ability  to  produce  wealth.” 

“ Joint  and  Composite  Demand  and  Supply”  occupy  eleven  pages, 
with  frequent^and  elaborate  foot-notes,  and  also  eight  intricate  mathe- 
matical notes  in  the  appendix.  One  of  these  (No.  14)  is  here  given  as 


a sample  of  the  diablery  of  recent  “ economics.” 

Note  XIV.  (page  434). 

Let  the  demand  equation  for  knives  be  y — F{x ) (i), 

let  the  supply  equation  for  knives  be  y = <1  ( x ) (2), 

let  that  for  handles  be  y = ^(x) (3) » 

and  that  for  blades  be  y = 02(-r) (4), 

then  the  demand  equation  for  handles  is  y = f\{f)  = F(x)  — q2 M • • ■ • (5)- 


Japanese  Notions  of  Europea7i  Political  Economy.  27 


The  measure  of  elasticity  for  (5)  is  — 


that  is 


jxfi'M)-  \ that  is 
U(*)J 

f xF'(x)  --  x<p2'(x)}  ~ 1 . 

1 /iW  j 

xF'{x)  ' F(x)  x<p2'(x)}  ~ 1 
Px)  ‘ f,(x)  + /i(x)  j 


This  will  be  the  smaller  the  more  fully  the  following  conditions  are  satisfied  : 

(i)  that  — XJL  ini,  which  is  necessarily  positive,  be  large, — i.e.,  that  the  elasticity  of 

the  demand  for  knives  be  small ; (ii)  that  02  /(.r)be  positive  and  large, — i.e.,  that  the 
supply  price  for  blades  should  increase  rapidly  with  an  increase,  and  diminish 

rapidly  with  a diminution  of  the  amount  supplied;  and  (iii)  that  should  be 

large ; that  is,  that  the  price  of  handles  should  be  but  a small  part  of  the  price  of 
knives. 

A similar,  but  more  complex  inquiry,  leads  to  substantially  the  same  results, 
when  the  units  of  the  factors  of  production  are  not  fixed,  but  vary,  as  in  the 
preceding  note. 


Although  devoting  a whole  chapter  to  wealth,  he  gives  no  defini- 
tion of  it,  the  nearest  approach  being,  ‘‘All  wealth  consists  of  things 
that  satisfy  wants,  directly  or  indirectly.  All  wealth,  therefore,  con- 
sists of  goods;  but  not  all  kinds  of  goods  are  reckoned  as  wealth.” 
But  he  nowhere  tells  us  what  goods  are  wealth  and  what  goods  are  not. 
But  evidently  in  his  arguments  he  treats  “land”  as  wealth  ; and  he 
makes  the  direct  statement  that  “we  ought  for  many  purposes  to 
reckon  the  Thames  a part  of  England’s  wealth.” 


J.  Shields  Nicholson,  M.A.,  D.Sc.,  Professor  of  Political  Econ- 
omy in  the  University  of  Edinburgh,  some  time  Examiner  in  the  Uni- 
versities of  Cambridge,  London,  and  Victoria. 

At  the. beginning  of  his  “ Introduction”  * he  devotes  two  pages  to 
a definition  of  “economics,”  commencing,  “As  it  is  impossible  to 
compress  a treatise  into  a sentence,  it  follows  that  a preliminary  defini- 
tion of  any  science  can  be  neither  adequate  nor  exhaustive,”  and  then 
leaves  the  reader  in  doubt. 

As  to  the  precision  of  terms  so  insisted  upon  by  Perry  and  many 
other  writers,  and  by  all  the  logicians,  he  writes,  “ It  is  admitted  that 
economic  terms  are  in  general  incapable  of  precise  and  rigid  defini- 
tion, and  that  a debatable  margin  must  be  left  between  economic 
species”  (37). 

In  this  introduction  of  eighteen  pages  the  paragraphs  are  headed, 
“1.  Definitions  of  Political  Economy.  2.  The  Popular  Conception 
of  Wealth.  3.  The  Economic  Conception  of  Wealth.  4.  Political 
Economy  as  a Science.  5.  The  Methods  of  Political  Economy.” 
Yet,  notwithstanding  these  headings,  except  that  he  says,  “ Its  province 
(P.  E.)  may  perhaps  be  best  described  provisionally,  in  the  words  of 
Adam  Smith,  as  an  inquiry  into  the  nature  and  service  of  the  wealth  of 
nations,”  he  nowhere  defines  either  political  economy  or  wealth.  The 
chapter  ends  (and  with  its  beginning  we  don’t  wonder  at  it),  “ In  con- 


* To  his  “ Principles  of  Political  Economy,”  1893. 


28  Japanese  Notions  of  European  Political  Economy. 

elusion,  the  reader  may  be  warned  that  in  the  study  of  political  econ- 
omy he  will  meet  with  difficulties  of  various  kinds.” 

His  “root  idea  of  capital”  is,  “Capital  is  wealth  set  aside  for 
the  satisfaction — directly  or  indirectly — of  future  needs”  (n).  He 
makes  much  reference  to  Boehm-Bawark  and  the  “positive  theory  of 
capital”  treating  of  “Productive  capital,”  “Consumptive  capital,” 
“Potential  capital,”  “Fixed  capital,”  and  “Circulating  capital.” 
And  gives  no  definite  reply  to  his  own  question,  “ Does  capital  in- 
clude what  are  called  immaterial  as  distinct  from  material  utilities  ?” 
(bold-face  type  mine).  Industry,  he  says,  is  limited  by  capital.* 
Capital  is  the  result  of  saving.  Demand  for  commodities  is  not  a de- 
mand for  labor.  “It  has  been  admitted  that  most  of  the  valuable 
qualities  of  land  are  capital  in  the  economic  sense.”  Oh!  brown 
brother  students  of  Dai  Nippon,  have  here  respect  for  your  own  powers. 
Do  some  thinking  for  yourselves.  Should  this  closing  word  be 
“sense,”  as  it  is  written,  or  “ nonsense”  ? 

With  little  glimmer  to  aid  us  we  wander  in  a Scotch  fog,  where 
nothing  is  defined  and  nothing  is  certain  except  the  confusion  of  the 
guide  ; stumbling  at  every  step  against  some  such  cobble  as  this  : “Is 
all  capital  the  result  of  labor  ? . . . The  answer,  as  in  all  questions  of 
definition,  must  depend  upon  . . . the  problem  in  hand,”  or  as  this, 
“ On  the  other  hand,  however,  it  is  extremely  difficult,”  etc.,  etc., 
etc.,  ad  infinitum , throughout  the  book. 

Chapter  IV,  Book  i,  treats  of  “land.”  The  chapter  is  headed 
“Nature,”  but  the  pages  are  capped  with  the  word  ‘.‘Production.’-’ 
As  in  the  others,  all  is  indefinite.  The  mists  never  clear  away.  “ Of 
the  Gifts  of  Nature  some  are  practically  unlimited,  others  limited.  The 
distinction  between  the  unlimited  and  limited  utilities  afforded  to  man 
by  nature,  as  so  often  happens  in  economic  classification,  is  indicated 
by  a line  which  varies  in  different  times  and  places.” 

Chapter  IX,  thirteen  pages,  headed  “ Large  and  Small  Farming,” 
is  better  fitted  for  a work  on  agriculture  to  guide  a country  laird. 

Chapter  V,  “Labor”  (which,  however,  is  not  defined),  is  headed 
by  an  analysis  of  contents,  thus:  “Twofold  meaning  of  Labor;  and 
first  of  Subjective  Labor.  Labor  is  used  in  two  different  senses,  which 
are  most  briefly  described  by  the  philosophic  terms  subjective  and 
objective ; that  is  to  say,  labor  may  be  considered,  on  the  one  hand, 
as  involving  a certain  degree  and  kind  of  feeling  on  the  part  of  the 
laborer,  and  on  the  other,  as  effecting  a certain  result  in  doing  a cer- 
tain amount  of  work.  In  general  the  nature  of  the  feeling  involved 
in  economic  labor  must  be  regarded  as  in  itself  painful,  disagreeable, 
or  irksome,  or,  at  any  rate,  as  causing  a sense  of  effort  or  strain.  Ac- 
cordingly, as  a rule,  it  is  undertaken  and  endured  with  the  view  of 
some  ulterior  object,  such  as  the  satisfaction  of  present  or  future 
wants.”  There  is  much  reference  to  German  authors,  their  long  titled 
books  and  incomprehensible  contradictory  terms,  and  Marshall  is 
often  referred  to  and  criticised. 


Marshall.— Nicholson. — Economists  ? And  at  two  of  the  greatest 
of  British  Universities  ! For  incomprehensible  prosy  prolixity,  and 

* “ Behold  I have  given  thee  the  earth  as  thy  inheritance  and  dwelling-place. 
But  there  is  not  yet  a capitalist  to  hire  thee  so  that  thou  canst  labor  and  do  all  thy 
work.  So  the  Lord  formed  capitalists  of  the  dust  of  Havilah  wherein  is  gold,  and 
he  gave  the  earth  to  the  capitalists  so  that  Adam  should  not  stand  idle  and  die,  but 
till  the  ground  for  the  capitalists  and  live.”  Genesis  revised  by  Nicholson. — Makato. 


Japanese  Notions  of  European  Political  Economy.  29 

bad  English,  I should  give  the  palm  to  Marshall.  Though  Nicholson 
is  nearly  his  match.* 


Dati  was  born  into  the  world.  Honga  and  his  brethren  similarly  were  born 
into  the  world.  Dati  producing  nothing,  yet  gloriously  arrayed  and  wearing  curved 
swords  in  the  silken  folds  of  his  sash,  is  held  in  high  honor  as  he  sips  exquisite  tea 
in  the  cool  shade  of  the  cherry  blossoms.  Honga  and  his  brethren  producing  the 
silk,  and  the  sword-blades,  and  the  tea,  wearing  little  clothing  the  while,  toil  all  day 
and  every  day  at  weary  looms,  in  stifling  shops,  in  hot  tea-fields.  Oh  ! Shihosho, 
Oh!  wise  man,  thou  priest  of  the  common  father  of  us  all,  is  it  just  that  the  idle  few 
should  get  much  and  be  worshipped,  while  the  toiling  many  get  little  and  are  de- 
spised? “ Thou  dull  drudge,”  answered  Shihosho,  “shall  a wise  man  instruct  thee 
to  his  hurt  ? Is  a priest  needed  to  remind  thee  of  the-decree  of  God  that,  until  thou 
shallst  use  thine  own  mother-wit  the  oracles,  though  loud  sounding,  will  be  dumb?” 


In  former  feudal  times  in  Europe,  and  in  Japan  as  well,  when  the 
military  chiefs  held  their  lands  subject  to  military  service,  when  the 
rent  of  crown  lands  supported  the  civil  service,  and  when  the  church 
lands  supported  the  religious  institutions,  the  charities  and  schools,  the 
state  seems  to  have  met  with  few  financial  difficulties. 

This  was  not  the  “ Single  Tax,”  as  the  professors  sometimes  urge. 
Feudalism  was  a blending  of  the  Roman  individual  with  the  German 
tribal  or  communal  ownership.  It  was  but  a partial  recognition  of  the 
truth  that  the  “rent”  of  a country  belongs  to  the  people  of  the 
country.  For  a large  part  of  the  inhabitants,  as  serfs  or  slaves,  were 
completely  landless,  while  the  freedom  of  all  was  hampered  by  the 
excessive  landed  power  of  great  churchmen,  manorial  lords,  barons, 
and  dukes.  In  the  towns,  too,  full  private  ownership  of  land  with  its 
evil  consequences  prevailed  from  the  first. 

But  with  the  development  of  private  ownership  of  “rent”  difficul- 
ties have  arisen,  and  insufficient  revenues  have  led  to  national  and 
municipal  debts.  The  revenue  of  Japan,  as  of  America  and  European 
nations,  is  mainly  derived  from  taxes  on  “wealth”  (true  wealth) 
and  industry  (including,  of  course,  trade).  Such  taxes  tend  to  check 
the  production  of  wealth  and  to  restrain  industry.  The  higher  they 
become  the  more  repressive  they  become.  With  progress  in  popu- 
lation and  civilization  greater  and  greater  funds  are  needed  for  public 
use.  In  the  village  each  one  has  his  own  well,  uses  his  own  lamp,  and, 
needing  neither  vehicle  nor  messenger,  can  by  walking  readily  reach  all 
desired  points.  As  the  village  grows  to  a city  the  wells  give  way  to 
water-works,  the  lamps  to  gas-works,  while  street-cars  and  telephones 
become  indispensable  to  the  greater  distances.  But,  property  created 
by  human  industry  (wealth,  including  capital)  often  unable  to  bear 
further  weight  of  taxation  to  construct  them,  these  institutions,  monopo- 
lies in  their  very  nature,  are  apt  to  fall  into  private  hands.  The  result 
being  always  corporate  extortion  and  the  corruption  of  the  legislative 
bodies  concerned.  So  corrupt,  ultimately,  that  the  people  will  hardly 
listen  to  a proposal  for  public  ownership,  as  dreading  the  venality  of 
the  officials  who  would  control. f 


* Shall  I let  this  stand?  Justice  answers  unhesitatingly,  Yes.  They  are  pitifully 
entangled  (as  I was  myself)  in  the  customs  of  their  times,  and  their  books,  made 
“ to  darken  things  that  are  clear  to  the  open  mind,”  dwarf  and  blight  to  a state  of 
dry  rot  the  young  minds  who  struggle  long  and  vainly  to  comprehend  them. 

— Makato. 

| As  from  such  improvements  there  is  no  tendency  to  an  increase  of  the  values  of 
machinery,  merchandise,  or  houses,  but  only  of  land  or  “ rent,”  would  it  not  be  more 


30  Japanese  Notions  of  European  Political  Economy. 

I now  present,  extracted  from  many  eminent  economists,  their  defini- 
tions of  political  economy  and  their  definitions  of  wealth.  What  I have 
already  advanced  may  seem  sufficiently  contradictory  and  absurd  ; but 
by  these  quotations  the  reader  will  be  assured  that  in  the  schools  the 
confusion  is  general,  and  that  if  we  hope  to  arrive  at  truth  we  must 
take  other  guides  than  collegiate  professors  of  economics  and  finance. 

Adam  Smith,  whose  famous  “ Wealth  of  Nations”  was  published  in 
1776,  defines  political  economy  as  the  study  that  treats  of  “ the  causes 
of  the  improvement  in  the  productive  powers  of  labor,  and  the  order 
according  to  which  its  produce  is  naturally  distributed  among  the 
different  ranks  and  conditions  of  men  in  the  society.”  He  attempts  a 
formal  definition  of  capital,  but  not  of  wealth.  But  in  the  title  and 
elsewhere  in  his  book  he  uses  a term  indicating  that  he  excludes  evi- 
dences of  debt  and  land  values,  which,  though  they  may  bring 
wealth  to  the  individual,  form  no  part  of  the  “ wealth  of  nations,” 
inasmuch  as  all  the  bonds  and  land  titles  in  the  nation  might  be  de- 
stroyed without  loss  of  wealth.  For  what  one  would  lose  others 
would  gain.  Though,  after  all,  Smith  is  not  entirely  consistent  as  to 
the  real  nature  of  the  wealth  of  nations,  or  wealth  in  the  economic 
sense.  But  Smith,  and  most  of  the  earlier  writers  upon  political  econ- 
omy, agree  as  to  its  scope, — to  wit,  the  nature  of  wealth  and  the  laws 
of  its  production  and  distribution. 

Jean  Baptiste  Say,  in  “ A Treatise  on  Political  Economy,  or  the 
Production,  Distribution,  and  Consumption  of  Wealth,”  1803,  says, 
“ Political  economy  is  the  economy  of  society,  a science  combining 
results  of  our  observations  on  the  nature  and  functions  of  the  different 
parts  of  the  social  body.”  He  divides  wealth  into  national  and  social, 
and  applies  the  latter  term  to  whatever  is  susceptible  of  exchange. 

The  Earl  of  Lauderdale  (“An  Inquiry  into  the  Nature  and 
Origin  of  the  Public  Wealth,”  1804)  says,  “ ...  We  shall  endeavor 
to  establish  that  land,  labor,  and  capital  are  all  three  original  sources 
of  wealth.”  But  he  thinks  of  land  only  as  for  agriculture,  and  in 
places  treats  land  as  wealth.  He  makes  a distinction  between  private 
and  public  wealth.  Government  bonds  or  land  may  decline  in  value, 
and  as  same  interest  or  rent  is  paid  there  is  no  loss  of  private  wealth — 
only  public.  Sugar  from  a war  may  advance  in  price,  with  no  gain  to 
national  wealth. 

Lauderdale  sees  clearly  that  some  things  that  to  the  individual  are 
similar  to  wealth,  form  by  no  means  any  part  of  national  wealth.  In 
this  connection  he  refers  to  land  values,  and  suggests  that  hitherto  free 
wells  in  a desert  might  be  reduced  to  private  ownership,  and  thereby 
attain  a value  (exchange  value),  without  adding  in  the  least  to  the  gen- 
eral wealth  of  the  country.  For  what  the  well-owners  would  gain  the 
well-users  would  lose.  Bonds  given  by  government,  he  seems  to  feel, 
cannot  lorm  any  part  of  the  public  wealth.  He  remarks,  that  “we 
had  better  find  out  what  wealth  is  before  we  discuss  plans  for  increasing 
it.”  He  puts  labor  before  capital  in  the  production  of  wealth,  and 
says  that  wealth  can  only  be  increased  by  the  means  by  which  it  is 
produced. 

M.  Sismondi  (“  New  Principles  of  Political  Economy,”  1819)  says, 


rational  to  construct  them  in  toto  by  the  single  tax  on  “ rent,”  and  so  discourage  in- 
stead of  aiding  speculation  in  the  natural  opportunities  to  make  a living  (Land)  ? 
and  at  the  same  time  by  removing  tax  from  it  encourage  the  production  of  true 
wealth  ? — Makato. 


Japanese  Notions  of  European  Political  Economy.  3 1 

“Political  economy  treats  of  the  physical  welfare  of  man,  so  far  as  it 
can  be  the  work  of  government,  or  the  nature  and  cause  of  the  wealth 
of  nations.”  He  presents  no  definition  of  wealth,  and  uses  the  term 
indefinitely,  like  Smith. 

Henry  C.  Carey  (“Principles  of  Political  Economy,”  1840)  de- 
fines political  economy  as  “ the  science  of  the  laws  which  govern  man 
in  his  efforts  to  secure  for  himself  the  highest  individuality  and  the 
greatest  power  of  his  association  with  his  fellow-men.”  Wealth  he 
does  not  define. 

Pierre  Joseph  Proudhon  (“  Qu’est-ce  que  la  Propriete?”  1840). 
Proudhon  is  the  father  of  philosophic  “anarchism,”  and  is  not  classed 
as  an  economist.  To  the  question,  “ What  is  property?”  he  responds, 
“La  propriete  c’est  le  vol”  (property  is  robbery).  He  don’t  define 
wealth. 

M.  Bastiat  (“Harmonies  of  Political  Economy,”  1840),  says, 
“ Political  economy  is  the  theory  of  exchange.”  “ Wealth,”  in  politi- 
cal economy,  he  writes,  “has  two  meanings.  Effective  wealth, 
real  and  realizing  satisfactions,  or  the  aggregate  of  utilities  which 
human  labor,  aided  by  the  co-operation  of  natural  agents,  places  within 
the  reach  of  society.  Relative  wealth, — that  is  to  say,  the  propor- 
tional share  of  each  in  the  general  riches,  a share  determined  by  value.” 
“ If  we  regard  products  with  reference  to  their  value,  we  have  to  do 
with  a species  of  wealth  which  procures  value  to  the  society,  and  which 
I call  the  wealth  of  value.  It  is  this  last  species  of  wealth  wLich  forms 
the  special  study  of  political  economy.” 

John  Stuart  Mill  (“  Principles  of  Political  Economy,”  1848), 
says,  “ Writers  on  political  economy  profess  to  teach,  or  to  investigate, 
the  nature  of  wealth  and  the  laws  of  its  production  and  distribution.” 
“ Wealth”  he  defines  to  be  all  useful  and  agreeable  things  which  pos- 
sess exchangeable  value,  or,  in  other  words,  all  useful  and  agreeable 
things  except  those  which  can  be  obtained,  in  the  quantity  desired, 
without  labor  or  sacrifice.  ’ ’ 

Carl  Marx  (“  Das  Kapital,”  1867).  Marx,  like  Proudhon,  is  not 
ranked  as  an  “economist.”  In  his  work  upon  “capital”  he  is  not 
definite  upon  the  limits  of  capital,  including  “land”  in  the  term,  and 
makes  no  definition  of  “wealth.” 

J.  R.  McCulloch  (“Principles  of  Political  Economy,”  1849)  says, 
“ Political  economy  is  the  science  of  the  laws  which  regulate  the 
production,  accumulation,  distribution,  and  consumption  of  those  arti- 
cles or  productions  that  are  necessary,  useful,  or  agreeable  to  man,  and 
which  at  the  same  time  possess  exchangeable  value.”  Wealth  con- 
sists of  “those  articles  or  productions  which  have  exchangeable  value, 
and  are  either  necessary,  useful,  or  agreeable  to  man.” 

William  Nassau  Senior  (“  Outlines  of  Political  Economy,”  1850) 
calls  political  economy  “ the  science  which  treats  of  the  nature,  the 
production,  and  distribution  of  wealth.  Wealth,  all  those  things,  and 
those  things  only  which  are  transferable,  are  limited  in  supply,  and  are 
directly  or  indirectly  productive  of  pleasure  or  preventive  of  pain.  . . . 
Health,  strength,  and  knowledge,  and  the  other  acquired  powers  of 
body  and  mind,  appear  to  us  to  be  articles  of  wealth.” 

Patrick  Edward  Dove  (“Elements  of  Political  Science,”  1854) 
says,  “It  is  the  province  of  politics  (an  abstract  science)  to  deter- 
mine the  laws  and  the  natural  theory  of  property,  and  to  settle  by 
axiom  the  principles  on  which  the  objects  existing  in  nature  should  be 
rightfully  distributed ; and  it  is  the  province  of  political  economy 


32  Japanese  Notions  of  European  Political  Economy. 

(an  inductive  science)  to  determine  in  whose  possession  the  ob- 
jects of  nature  are  most  beneficially  placed.”  Wealth  he  don’t 
define. 

Amasa  Walker  (“Science  of  Wealth,”  1866)  says,  “Political 
economy  is  the  science  of  wealth,  and  professes  to  teach  the  laws  by 
which  the  production  and  consumption  of  wealth  are  governed.” 
Wealth  consists  of  “ all  articles  of  value  and  no  other.” 

Horace  Greeley  (“  Political  Economy,”  1869).  Greeley,  founder 
and  editor  of  the  New  York  Tribune,  was  principally  a politician  ; but  he 
was  an  admirer  of  Fourier  and  wrote  the  one  book  above.  He  gives  no 
definition  of  political  economy,  but  says  that  “ the  true  end  of  politi- 
cal economy  is  the  conversion  of  idlers  and  useless  exchangers  or 
traffickers  into  habitual  effective  producers  of  wealth.”  . . . “ One  of 
the  chief  waste-gates  of  human  effort”  is  in  the  transportation  across 
seas  and  continents  of  staples  or  fabrics  that  might  be  made  at  home. 
He  makes  the  term  “ property”  coterminous  with  “ wealth.”  Treats 
land  as  capital  or  wealth.  Thinks  that  the  distinctions  drawn  between 
capital  and  wealth  are  illusory.  “ All  products  not  consumed  are  ' 
capital  or  wealth.”  “Capital  is  the  unconsumed  and  unwasted 
remainder  of  the  fruits  of  industry,”  including  land  in  “fruits  of 
industry.” 

James  E.  Thorold  Rogers  (“Manual  of  Political  Economy,” 
1869)  says,  “The  subject  of  a treatise  on  political  economy  is  the 
services  which  men  render  to  each  other ; but  those  services  only  on 
which  a price  can  be  put,  and  which  are  rendered  in  order  that  such 
a price  maybe  put  on  them.”  He  includes  in  wealth  “skill  and 
knowledge,”  and,  without  saying  that  land  is  wealth,  treats  it  as  wealth. 
But  he  makes  no  definition  of  wealth. 

W.  Stanley  Jevons  (“The  Theory  of  Political  Economy,”  (1871) 
says,  “ The  science  of  political  economy  rests  upon  a few  notions  of 
an  apparently  simple  character.  Utility,  value,  labor,  land,  capital,  are 
the  elements  of  the  subject,  and  whoever  has  a thorough  comprehension 
of  their  nature  must  possess,  or  be  soon  able  to  acquire,  a knowledge 
of  the  whole  science.”  Wealth  is  “what  is  (1)  transferable,  (2) 
limited  in  supply,  (3)  useful.”  “Capital  . . . consists  merely  in 
the  aggregate  of  those  commodities  which  are  required  for  sustaining 
laborers  of  any  kind  or  class  engaged  in  work.”  Commercial  depres- 
sions, which  have  had  so  many  attempted  explanations  from  the  pro- 
fessors, are  by  him  thought  to  be  associated  with  the  periodicity  of  sun 
spots. 

John  E.  Cairnes  (“  Some  Leading  Principles  of  Political  Econ- 
omy, Newly  Expounded,”  1874).  “Political  economy,”  he  says, 

“ is  the  science  which  traces  the  phenomena  of  the  production  and  dis- 
tribution of  wealth  up  to  their  causes  in  the  principles  of  human  nature, 
and  the  laws  and  events,  physical,  political,  and  social,  of  the  external 
world.”  Wealth  he  makes  no  attempt  to  define. 

Bonamy  Price  (“  Chapters  in  Practical  Political  Economy,”  1878). 
The  introductory  chapter  of  thirty-one  pages  is  headed,  “ Is  Political 
Economy  a Science?”  and  ends  by  leaving  the  reader  in  doubt  both 
as  to  that  and  also  as  to  his  definition  of  wealth.  “What  is  political 
economy  ? It  is  scarcely  possible  to  put  a more  difficult  question,  . . . 
a precise  answer  to  it  will  never  be  given.”  “Wealth  is  its  subject, 
what  it  speaks  of.  But  what  is  wealth  ? Here,  again,  we  have  a ques- 
tion as  hard  and  puzzling  as  ever.”  “But  it  will  be  said,  Must  we 
give  up  all  hope  of  a scientific  definition  of  wealth?  We  must.” 


Japanese  Notions  of  European  Political  Economy.  3 3 

Emile  de  Laveleye  (“Political  Economy,”  1882)  says,  “ Politi- 
cal economy  may,  therefore,  be  defined  as  the  science  which  deter- 
mines what  laws  men  ought  to  adopt  in  order  that  they  may  with  the 
least  possible  exertion  procure  the  greatest  abundance  of  things  useful 
for  the  satisfaction  of  their  wants,  may  distribute  them  justly  and  con- 
sume them  rationally.”  Wealth  is  “ everything  which  answers  man’s 
rational  wants.  A useful  service  and  a useful  object  are  equally  wealth. 
. . . Wealth  is  what  is  good  and  useful, — a good  climate,  well-kept 
roads,  seas  teeming  with  fish  are  unquestionably  wealth  to  a country, 
and  yet  they  cannot  be  bought.” 

Henry  Sidgwick  (“  Political  Economy,”  1883)  says,  “Political 
economy,  in  England  at  least,  is  now  almost  universally  understood  to 
be  a study  or  inquiry  concerned  with  the  production,  distribution,  and 
exchange  of  wealth.”  But  he  thinks  it  will  be  necessary  to  “substi- 
tute for  wealth  other  terms  of  somewhat  different  denotations.” 
Twenty-two  pages  are  devoted  to  an  attempted  definition  of  wealth, 
and  he  leaves  it  apparently  undetermined. 

Simon  Newcomb  (“  Principles  of  Political  Economy,”  1886).  New- 
comb is  astronomer  in  charge  of  Washington  Observatory.  He  says, 
“ Political  economy  treats  of  human  desires  and  the  laws  and  con- 
ditions of  their  gratification  under  the  circumstances  in  which  men 
actually  find  themselves.”  Wealth  “in  its  widest  sense  designates 
all  those  things  which  men  gain  by  labor  and  employ  to  gratify  their 
desires.”  “That  for  the  enjoyment  of  which  people  pay  money. 
The  skill,  business  ability,  or  knowledge  which  enables  their  possessors 
to  contribute  to  the  enjoyment  of  others,  including  the  talents  of  the 
actor,  the  ability  of  the  man  of  business,  the  knowledge  of  the  lawyer, 
and  the  skill  of  the  physician  is  to  be  considered  wealth  when  we  use 
the  term  in  its  most  extended  sense.” 

J.  Lawrence  Laughlin  (“  Elements  of  Political  Economy,” 
1887),  says,  “Political  economy  attempts  to  show  what  the  rules 
are  that  control  the  production,  exchange,  and  distribution  of  all  the 
wealth  which  we  see  in  the  wonderful  industrial  system  about  us.”  He 
defines  “material  wealth”  as  something  which  satisfies  a want; 
cannot  be  obtained  without  some  sacrifice  of  exertion,  and  is  trans- 
ferable ; but  he  also  speaks  of  “ immaterial  wealth”  without  defining  it. 

Francis  A.  Walker  (“  Political  Economy,”  1888),  says,  “Politi- 
cal economy  is  the  name  of  that  body  of  knowledge  that  relates  to 
wealth.”  All  that  it  has  to  do  is  “ to  find  out  how  wealth  is  produced, 
exchanged,  distributed,  and  consumed.”  “The  political  economist  is 
not  to  be  influenced  by  any  political,  ethical,  or  social  considera- 
tions.” Wealth  he  defines  to  be  “all  articles  of  value  and  nothing 
else.” 

As  to  the  taxation  of  “rent,”  which  the  physiocrats  of  the  last 
century  argued  should  be  the  only  tax,  after  giving  an  extract  from 
each  of  two  most  eminent  political  economists,  I add,  by  way  of  con- 
trast, one  from  Walker : 

Adam  Smith  (part  ii,  chap,  ii,  book  v)  says,  “ Ground-rents  are  a still  more 
proper  subject  of  taxation  than  the  rent  of  houses.  ...  It  would  fall  altogether 
upon  the  owner  of  the  ground-rent,  who  acts  always  as  a monopolist,  and  exacts  the 
greatest  rent  that  can  be  got  for  the  use  of  his  ground.” 

John  Stuart  Mill  (book  v,  chap,  ii)  writes,  “ Suppose  that  there  is  a kind  of 
income  which  constantly  tends  to  increase,  without  any  exertion  or  sacrifice  on  the 
part  of  the  owners, — these  owners  constituting  a class  in  the  community  whom  the 
natural  course  of  things  progressively  enriches  consistently  with  complete  passive- 
ness on  their  own  part.  In  such  a case  it  would  be  no  violation  of  the  principles  on 


34  Japanese  Notions  of  European  Political  Economy. 

which  private  property  is  grounded  if  the  state  should  appropriate  this  increase  of 
wealth,  or  part  of  it,  as  it  arises.  This  would  not  properly  be  taking  anything  from 
anybody ; it  would  merely  be  applying  an  accession  of  wealth,  created  by  circum- 
stances, to  the  benefit  of  society,  instead  of  allowing  it  to  become  an  unearned 
appendage  to  the  riches  of  a particular  class.  Now  this  is  actually  the  case  with 
rent.” 

Francis  A.  Walker  (after  stating  Henry  George’s  proposition  to  abolish  all 
taxes  save  that  upon  “ rent”)  says,  “ So  much  for  Mr.  George’s  practical  proposals. 

I will  not  insult  my  readers  by  discussing  a project  so  steeped  in  infamy”  (P.  E.,  p. 

419). 

Van  Buren  Denslow  (“Principles  of  the  Economic  Philosophy 
of  Society,  Government,  and  Industry,”  1888)  says,  “Political 
economy  treats  of  the  duties  of  government  to  the  people  as  respects 
their  social  well-being,  and  the  natural  laws,  principles,  and  truths 
which  apply  to  society  as  an  organization  that  subsists  by  material 
means,  growing  as  they  are  supplied  and  dying  as  they  are  withheld.” 
Speaking  of  the  professors  of  political  economy  he  says,  “ They  dis- 
member it  (political  economy),  and  the  fragments  appear  in  the  next 
edition  of  their  own  works  contradicted  and  refuted  by  piecemeal.  . . . 
So  Adam  Smith  is  modified  by  Ricardo,  Ricardo  by  McCulloch,  and 
all  by  Mill,  Carey,  Macleod,  and  Jevons.  In  this  discord  the  true 
science  of  political  economy  seems  a dissolving  vision.  ...  If  we  in- 
clude as  economists  all  men  who  attract  attention  and  followers  . . . 
political  economy  becomes  an  incongruous  babel  of  conflicting  oracles.  ’ ’ 
He  speaks  of  the  “utter  discord”  in  the  definition  of  wealth.  And 
his  own,  six-page,  unsuccessful  effort  ends  thus  : “ Those,  therefore,  who 
make  wealth  consist  in  exchangeable  commodities  grasp  a quality  which 
is  an  incident  to  wealth  in  a commercial  period,  which  is  partial  and 
may  be  evanescent.  Those  who  define  it  as  power  seize  upon  the 
element  in  which  it  is  eternal.” 

Richard  T.  Ely  (“Outlines  of  Economics,”  1893).  As  well  as  I 
can  make  it  out  his  definitions  are:  (1)  Political  economy  “ treats  of 
man  in  society  in  a process  of  development,”  and  (2)  “economics 
may  be  defined  as  the  science  of  those  social  phenomena  to  which  the 
wealth-getting  and  wealth-using  activity  of  man  gives  rise.”  Wealth. 
He  gives  several  definitions  of  others,  and  leaves  doubt  upon  his  own. 

Henry  D.  Macleod  (“  Elements  of  Economics,”  1890)  says  that 
economics  or  the  science  of  wealth  is  a physical  science.  Then  having 
found  out  what  wealth  is,  “ economics  is  the  science  of  the  laws  which 
govern  the  phenomena  relating  to  that  quality.”  Wealth  is  “ any- 
thing whatever  that  can  be  bought,  sold,  or  exchanged,  or  whose  value 
can  be  measured  in  money.  . . . Wealth  is  nothing  but  exchangeable 
rights.” 

Henry  D.  Lloyd  (“  Wealth  z\t.  Commonwealth,”  1894).  Lloyd 
is  a “socialist”  and  not  an  economist.  However,  he  don’t  define 

wealth. 

A.  T.  Hadley  (“Economics:  An  Account  of  the  Relations  be- 
tween Private  Property  and  Public  Welfare,  ” 1896).  Commencing  at 
page  1,  headed  “ Preliminary  Definitions,”  are  twenty-five  pages  on 
“Public  and  Private  Wealth,  the  Distinction,”  “Income  and  Capi- 
tal,” “Different  Meanings  of  Capital,”  “ Mercantiles  and  Physio- 
crats,” “Modern  Views  of  Moneymaking,”  “Economic  Laws,” 
“ Individualism  and  Socialism,”  “ Intellect  versus  Emotions,”  “ The 
Struggle  for  Existence,”  “Evolution  of  Human  Society,”  “Eco- 
nomics and  Ethics,”  “ Historical  Method  of  Inquiry.”  In  these 
twenty  five  pages  (a  limited  field  for  so  many  definitions  and  so  wide 


Japanese  Notions  of  European  Political  Economy.  3 5 

a discussion)  the  reader  is  supposed  to  learn,  besides  many  other 
things,  the  scope  of  economics  and  the  meaning  of  wealth.  But 
I must  say,  to  be  just,  that  therein  the  devil  himself,  with  all  his  cun- 
ning, let  alone  the  immature  students  of  Yale,  would  fail  to  find  any 
definite  notion  of  anything. 

Maffeo  Pantaleoni  (“Pure  Economics,”  1898).  “Economic 
science,”  he  says,  “consists  of  wealth  systematically  deduced  from 
the  hypothesis  that  men  are  actuated  exclusively  by  the  desire  to 
realize  the  fullest  possible  satisfaction  of  their  wants  with  the  least 
possible  individual  sacrifice,”  or,  more  clearly,  the  science  of  values. 
“ The  wealth  of  an  individual  is  the  sum  of  the  scarce  or  costly  or 
valuable  things  possessed  by  him,”  and  in]  eight  pages  he  leaves  the 
reader  in  doubt  as  to  what  he  includes  in  the  term.  But  he  includes 
land,  bonds,  etc.,  by  his  definition.  He  devotes  seven  pages  to 
“ Wealth  of  a Group  of  Individuals  or  a Nation.”  Quite  incompre- 
hensible. One  man  of  a group  is  subject  to  malarial  fever.  Quinine, 
therefore,  in  his  possession  would  be  wealth ; but  not  wealth  in  the 
possession  of  an  “immune.”  He  emulates  Marshall  in  his  mathe- 
matics, but  his  illustrations,  mostly  geometric,  are  equally  opaque. 


Most  of  these  men,  whose  numerous  “degrees”  and  titles,  in  order 
to  economize  space,  I have  omitted,  are,  or  have  been,  occupants  of 
chairs  of  political  economy  in  the  greatest  of  European  and  American 
universities. 


But  Tentearo  Makato  must  stop.  Of  such  contradictory  and  ridic- 
ulous writings  there  seems  to  be  no  end.  And,  as  I have  said,  not 
wishing  my  veracity  to  be  doubted,  I have  omitted  the  more  absurd. 
For  though  political  economy  has  engrossed  the  attention  of  some  of 
the  most  subtle  and  powerful  intellects  (three  or  four  of  whom  I have 
quoted),  by  far  the  largest  part  of  its  literature  is  by  men  of  small 
caliber  and  but  poorly  equipped. 

As  I contemplate  the  void  through  which  I have  passed,  it  seems  a 
very  bank  of  New  Foundland, — shallow  and  always  befogged,  where 
the  passing  barks,  like  the  passing  professors,  are  ringing  their  bells 
and  blowing  their  horns.  Unable  at  times  to  avoid  ruinous  collisions  ; 
but,  all  alike,  leaving  no  lasting  impress  upon  the  watery  waste. 

The  numerous  histories  of  political  economy  are  really  not  properly 
histories,  but  critical  essays,  in  which  authors  and  schools  are  always 
tested  by  that  ideal  standard, — the  beliefs  of  the  historian  himself. 
How  writers  and  readers  of  such  books  can,  in  connection  with  politi- 
cal economy  or  economics,  use  the  term  “science”  is  hard  to  be  un- 
derstood, for  no  orator  or  poet  need  go  beyond  these  in  seeking  a 
striking  metaphor  for  chaos. 

Nearly  all  the  writers,  even  those  who  fancy  that  they  oppose 
Malthus,  or  who  wrote  before  him,  unconsciously,  in  their  reasonings, 
accept  his  notions  about  population.  For,  in  connection  with  low 
wages  and  want,  they  all  speak  of  overcrowded  lands,  and  emphati- 
cally so  of  Japan,  although,  while  three-fourths  of  its  surface  have  so 
far  never  been  cultivated,  great  quantities  of  agricultural  products,  as 
silk,  rice,  tea,  and  so  on,  are  exported.  Besides,  the  amount  of  labor 
sometimes  expended  to  get  food  for  one  rich  man  would  produce  plain 
food  for  five  hundred  of  his  brethren. 

There  is  a tendency,  especially  among  recent  writers,  to  resort  to 


36  Japanese  Notions  of  European  Political  Economy. 

mathematical  illustrations  or  proofs,  usually  in  appended  notes.  In- 
definite as  to  principles,  in  details  they  apply  algebraic  formulas,  im- 
pressive and  occult,  and  assumed  to  be  as  scientifically  unassailable  as 
the  proposition  that  2 added  to  2 make  4.* 

Ah  ! me,  what  a literature  ! How  confused  are  these  men  ! I am 
reminded  of  Mandeville’s  swelling  and  splendid  Japanese  vases, — im- 
posing without,  but  within  nothing  but  cobwebs  and  dust. 

Co-operation  between  labor  and  capital  by  many  is  urged  as  the  remedy  for  the 
grievances  of  the  working  classes.  But  the  evils  do  not  arise  from  any  conflict  be- 
tween labor  and  capital.  Co-operation  in  supply  can  only  reduce  the  cost  of  ex- 
change, and  its  effect  would  be  the  same  as  the  improvements  that  have  during  this 
century  so  wonderfully  facilitated  exchange, — to  increase  “ rent.”  Co-operation  in 
production  is  but  the  method  of  the  whaling  service  or  of  the  metayer  system  in  agri- 
culture. If  (by  inciting  the  men  to  work  harder)  production  is  increased,  its  effect 
would  be  only  in  the  direction  of  the  steam-engine,  cotton-gin,  and  so  on, — that  is, 
to  increase  rent. 

That  Godin’s  attempt  in  France,  and  others  in  England,  have  improved  the  con- 
dition of  the  workingmen  concerned  is  due  to  the  fact  that  these  cases  are  isolated. 
Just  as  in  a country  where  few  can  write,  the  penman  has  an  advantage  that  ceases 
when  writing  becomes  general.  Godin,  a man  of  noble  aspirations,  in  his  book 
“ Social  Solutions,”  says,  “ Wealth  is  composed  of  two  elements, — the  works  of 
nature  (land)  and  the  labor  of  man  (by  the  latter  he  means  material  things  produced 
by  labor  from  land).  The  first  is  inalienable,  is  given  for  the  common  use  of  all,  and 
society  cannot  justly  place  any  obstacle  to  the  exercise  of  this  right.”  Yet,  like  the 
professors,  he  includes  land  in  the  term  capital,  and  says  that  capital  is  equivalent  to 
saved-up  labor,  and  that  its  service  in  production  is  recognized  by  the  payment  of 
interest.  “ Distribution”  is  between  labor,  capital,  and  invention.  Labor  gets 
“ wages,”  capital  interest  or  rent,  and  invention  gets  prizes.  The  remainder  is 
profits.  He  omits  land  in  his  arguments,  saying,  for  example,  “ The  questions  touch- 
ing the  relations  between  capital  and  labor  are  becoming  more  and  more  urgent.” 
Fourier,  in  the  same  way,  bases  his  theory  upon  the  association  of  “ capital,  labor, 
and  skill,”  omitting  land  as  a factor  in  production. 


The  years  spent  in  the  study  of  the  economics  of  the  schools  has 
not  been  in  vain.  Suspecting  its  futility  at  an  early  stage  of  my  in- 
vestigations, I did  not  labor,  as  do  so  many,  to  comprehend  the  incom- 
prehensible and  to  reconcile  the  most  absurd  fallacies  with  exact  reason- 
ing, till  the  intellectual  faculties  becoming  flaccid  cannot  reason  at 
all.  By  my  familiarity  with  their  contradictory  doctrines  I was  at 
last  made  certain  of  this,  that  “wherever  else  I might  find  truth,  I 
should  not  find  it  there.”  At  this  juncture  I received  from  an  Ameri- 
can missionary  at  Tokyo  a book,  accompanied  by  a letter,  commend- 
ing it,  and  urging  that  I should  give  time  to  its  study.  It  was  a work 
to  which  my  attention  had  many  times  been  called,  and  that  attempted 
to  solve  the  problem  of  the  persistence  of  want  amid  advancing  wealth, 
— “Progress  and  Poverty,”  by  Henry  George.  . It  was  often  mentioned 
in  the  press,  and  its  adherents,  called  •“  single  taxers,”  seemed  to  be 
gaining  in  numbers.  George  was  not  of  the  schools.  His  name  on  his 
title-page  was  garnished  with  the  certifying  brand  of  no  college  what- 
ever. He  had  been  mentioned  at  Yale,  but  always  with  strong  dissent, 
and  with  less  respect  than  Proudhon  or  Marx,  as  a socialistic,  popular 
writer,  whose  absurdities  could  have  no  effect  whatever  upon  men 
“scientifically  trained.”  However,  I found  later,  that  university  cur- 
riculum, though  it  encourages  physical  athletics,  discourages  mental, 
and  that  it  is  possible  for  one  to  graduate  with  a noble  physique  and  an 
atrophied  mind. 

* Says  Bonamy  Price,  the  Oxford  professor,  in  irritated  tone,  “ So  wild,  indeed, 
has  been  this  passion  for  scientific  treatment,  that  political  economy  has  been  trans- 
lated into  mathematical  formula.” — Makato. 


Japanese  Notions  of  European  Political  Economy.  37 

My  predecessor,  Teremoto,  had  been  deeply  impressed  by  Mr. 
George’s  writings,  and  had  urged  them  upon  me.  But,  still  imbued 
with  the  prejudices  of  the  universities,  though  I looked  askance  at 
their  teachings,  I looked  still  more  askance  at  his. 

Mr.  George,  about  1870,  coming  to  New  York  from  San  Francisco, 
where  the  greater  accessibility  of  land  afforded  greater  opportunity  to 
labor,  and  there  was  as  yet  little  poverty  and  distress,  was  so  struck  by 
“ the  squalid  misery  in  the  older  and  greater  city  that  it  appalled  and 
tormented  him,  and  would  not  let  him  rest  for  knowing  what  caused  it 
and  how  it  could  be  cured.” 

The  preface,  and  especially  the  introductory  chapter,  called  “The 
Problem,”  so  unlike  the  dull,  flat,  bad  English  of  recent  professors, 
who  spend  so  much  time  in  smattering  other  tongues,  to  the  neglect  of 
their  own,  that  they  write  nothing  with  elegance,  carried  me  away.  I 
soon  found  that  he  not  only  clearly  defined  his  terms,  but,  in  his  reason- 
ings, adhered  strictly  to  his  definitions.  I found  that  he  took  nothing  for 
granted,  but  brought  “even  accepted  theories  to  the  test  of  first  prin- 
ciples, and  when  they  did  not  stand  the  test,  freshly  interrogated  facts 
in  the  endeavor  to  discover  their  law.”  I had  studied  logic.  Here 
was  logic  in  action.  In  the  formal  science  I could  point  out  the  valid 
syllogisms  and  knew  the  “fallacies”  by  heart.  But  it  was  only  by 
this  exactly  applied  logic  that  I was  aroused  really  to  think. 

This  man,  who  I believe  to  be  the  freest  thinker  that  the  world  has 
known,  and  his  book  the  most  important  ever  given  by  man  to  men, 
concludes  that  the  earth  was  given  to  all  men,  of  all  generations,  and 
not  to  some  men.  That  by  man’s  nature,  who  seeks  to  gain  his  ends 
in  the  easiest  way,  some  parts  of  the  earth,  on  which  he  can  accomplish 
much,  become  more  valuable  than  other  parts  on  which  he  can  accom- 
plish less.  That  this  excess  of  productive  power,  causing  competition 
for  the  use  of  such  lands,  shows  itself  in  “ rent,”  which  is  a commu- 
nal product,  and  as  clearly  belongs  to  communities  as  the  remainder 
of  the  produced  wealth  belongs  to  individual  producers.  That  it  is  as 
unjust  to  take  from  the  individual  for  the  use  of  the  community  what 
has  been  produced  by  the  individual,  as  it  is  not  to  take  for  the  use 
of  all,  or  of  the  community,  that  which  is  produced  by  all,  or  by  the 
community.  That,  in  short,  “rent”  is  the  natural,  God  intended 
fund  for  general  public  use,  the  negation  of  which  law  is  fatal  to 
prosperity  and  happiness,  and,  ultimately,  destructive  of  the  freedom 
of  mankind. 

But  that,  on  the  contrary,  “ by  conforming  our  institutions  to  this 
divine  law  of  justice  we  will  bring  about  conditions  in  which  human 
nature  can  develop  its  best ; will  permit  such  enormous  production  of 
wealth  as  we  can  now  hardly  conceive ; will  secure  an  equitable  distri- 
bution ; will  solve  the  labor  problem  and  dispel  the  darkening  clouds 
now  gathering  over  the  horizon  of  European  civilization.  We  will 
make  undeserved  poverty  an  unknown  thing ; will  check  the  soul- 
destroying  greed  of  gain,  and  will  enable  men  to  be  at  least  as  honest, 
as  true,  as  considerate,  and  high-minded  as  they  would  like  to  be.  We 
will  open  to  all,  even  the  poorest,  the  comforts  and  refinements  and 
opportunities  of  an  advanced  civilization ; and  we  will  thus,  so  we  rev- 
erently believe,  clear  the  way  for  the  coming  of  that  kingdom  of  right 
and  justice,  and  consequently  of  abundance  and  peace  and  happiness, 
for  which  the  Master  told  his  disciples  to  pray  and  work.”  * 


* “The  strength  of  ‘ Progress  and  Poverty’  is  not  that  it  restated  fundamental 
truths  which  others  had  before  stated.  It  is  that  it  related  these  truths  to  all  other 


38  Japanese  Notions  of  European  Political  Economy. 


I found  that  the  French  founders  of  political  economy,  Quesnay 
and  his  fellows,  were  nearer  the  truth  than  Adam  Smith ; and,  as  will 
be  suggested  by  what  has  gone  before,  that  in  the  inability  of  the 
writers  to  define  “wealth,”  the  very  object-noun  or  subject-matter  of 
political  economy,  the  term  of  first  importance  in  the  science,  many 
really  acute  minds  had  wasted  their  energies  in  ineffectual  gropings ; 
for  “until  wealth  is  defined  there  can  be  no  science  of  political 
economy.”  Until  we  know  what  wealth  is,  how  is  it  possible  to  dis- 
cover the  laws  of  its  production  and  distribution  ? 

Inasmuch  as  “capital”  must,  like  all  “wealth,”  be  produced  by 
labor  from  land,  it  follows  that  there  are  but  two  primary  factors  in 
production, — labor  and  land  ; or,  as  we  might  say,  laborers  and  land, 
or  men  and  land.  Now,  some  men,  by  conquest  or  in  other  ways, 
may  be  reduced  to  the  private  ownership  of  other  men,  and  thus  have 
a buying  and  selling  value.  This  system  is  “chattel  slavery.”  The 
surface  of  the  world,  “land,”  in  the  same  way  can  be  reduced  to  the 
private  ownership  of  some  men  and  have  a buying  and  selling  value. 
This  system  is  “ prsedial  slavery,”  even  where  the  men,  not  being 
attached  to  and  sold  with  any  particular  land,  deem  themselves  free. 
The  ultimate  result  of  the  latter  form  is  apparently  more  fatal  than 
the  first.  Under  the  chattel  form  the  owners,  if  not  by  a sense  of  jus- 
tice or  personal  affection,  are  by  self-interest  and  public  opinion 
impelled  to  maintain  their  slaves  in  a certain  degree  of  comfort.  In 
sickness  they  are  nursed.  If  not  employed,  they  are  yet  provided 
with  shelter  and  food.  In  their  old  age  they  are  cared  for.  But,  with 
lapse  of  time,  this  form  of  slavery  has  always  given  way  to  the  second, 
for  the  reason  that  the  second  becomes  the  cheapest.  To  the  prsedial 
slaves  the  fear  of  discharge  is  more  effective  than  an  overseer  with  a 
whip.  No  capital  is  “invested”  in  these  men,  nor  any  capital  ad- 
vanced to  them.  They  do  the  advancing,  as  they  first  add  to  their 
employers’  capital  for  a week  or  a month.  When  no  employment 
offers  they  can  call  on  no  one  for  support,  while  the  fierce  competition 
among  them  “to  get  work”  tends  wages  to  the  minimum  of  chattel 
slaves. 

Thus  for  several  centuries  chattel  slavery  has  disappeared  in  Europe, 
while  in  Egypt,  India,  China,  Japan,  much  older  civilizations,  it  dis- 
appeared long  before.  Yet  in  no  countries  are  the  working,  wealth- 
producing  masses  reduced  to  so  low  a standard  of  comfort, — decidedly 
lower  than  that  of  the  former  negro  slaves  in  America.* * 

Civilization,  developing  first  along  the  Nile  and  the  Euphrates,  has 
from  these  original  centres  spread  both  eastward  and  westward.  In 
India,  Siam,  China,  and  even  in  Japan,  the  continental  limits  were 
long  ago  reached,  and  private  ownership  has  gone  on  to  its  ultimate 
results.  In  extending  westward,  the  vast  Mediterranean,  indented  with 


truths.  That  it  shattered  the  elaborate  structure  that  under  the  name  of  ‘ Political 
Economy’  had  been  built  up  to  hide  them,  and  restoring  what  had,  indeed,  been  a 
dismal  science  to  its  own  proper  symmetry,  made  it  the  science  of  hope  and  of  faith.” 
— Reply  to  charge  of  plagiarism,  H.  G. 

* Rent  tends  to  absorb  the  greater  part  of  the  yield  of  land,  no  matter  for  what  it 
may  be  used.  In  England  land  producing  on  the  average  say  twenty  bushels  of 
wheat  per  acre  will  rent  for  seven  dollars  and  fifty  cents.  In  Guernsey  middling 
quality  land  rents  for  twenty-five  dollars.  In  Switzerland,  another  country  of  petite 
culture  and  large  production,  thirty  dollars  is  an  average  rent  per  acre.  (Cyc.  Brit., 
vol.  i,  p.  413.)  In  cities  rent  rises  rapidly  to  hundreds  and  thousands  of  dollars  per 
year  per  acre.  In  New  York  some  land  (as  in  Wall  Street)  rents  at  the  rate  of  half 
a million  dollars  per  year  per  acre. — Makato. 


Japanese  Notions  of  European  Political  Economy.  39 

deep  gulfs  and  bays,  and  with  its  innumerable  islands  and  subsidiary 
seas,  so  adapted  to  the  navigation  of  early  days,  wonderfully  favored 
intercommunication  and  interchange  of  arts  and  ideas.  Later,  when 
private  ownership  of  land  in  the  South  had  overthrown  the  liberties 
of  the  people,  the  freer  populations  of  the  North  taking  up  this  de- 
clining civilization  of  the  South  carried  it  to  further  heights ; to  the 
discovery  of  gunpowder,  the  compass,  and  to  printing  from  types  ; 
thence  on  to  the  discovery  of  an  occidental  world,  to  steam  navigation 
and  the  railway,  making  accessible  vast  stretches  of  land,  tending, 
especially  in  this  century  of  steam,  to  better  the  condition  of  labor 
that  had  sunk  into  serfdom,  making  it  more  intelligent,  restless,  dis- 
satisfied, and  hopeful.  In  the  East,  on  the  contrary,  labor  is  at  the 
very  bottom.  There  is  stolidity,  calmness,  resignation,  despair.  In 
Japan  alone,  that  from  its  insular  structure  permits  greater  freedom  of 
movement  and  exchange,  though  the  conditions  are  bad,  labor  still  is 
cheerful. 

Civilization  seems  to  have  developed,  not  alone  from  a union  of 
contending  tribes  into  nations,  but  from  a union,  to  some  degree  at 
least  in  equality  of  opportunity,  or  community  of  land,  and  that  with 
time  there  develops  a more  absolute  ownership,  giving  birth  to  great 
estates  on  one  side,  and  a consequent  landlessness  on  the  other, — un- 
wonted power  and  unjustifiable  poverty; — whence  comes  dissension 
and  decline. 

The  greater  part  of  our  civil  law  springs  from  a necessary  effort  to 
adjust  progressing  civilization  to  a state  of  greater  and  greater  ine- 
quality; to  accommodate  nutriment  and  movement  to  the  weakening 
life  of  a disordered  frame  tending  to  dissolution. 

The  great  reform  that  in  the  middle  of  last  century  was  imper- 
fectly proposed  by  the  physiocrats  or  economists,  and  that  at  the  close 
of  the  present  is  shown  to  us  in  all  its  symmetry  and  beauty  by  Henry 
George,  comes  in  conflict,  not  only  with  existing  institutions,  but  with 
accustomed  habits  of  thought.  And,  though  obscured  from  our  people 
by  its  very  simplicity,  yet,  to  grasp  it,  requires  an  effort  often  beyond 
the  strength  of  men  unaccustomed  to  think, — the  effort  to  free  our 
minds  from  the  meshes  of  the  social  web  into  which  we  were  born. 


“ Property  in  land  is  as  indefensible  as  property  in  man.  It  is  so  absurdly  impol- 
itic, so  outrageously  unjust,  so  flagrantly  subversive  of  the  true  right  of  property, 
that  it  can  only  be  instituted  by  force  and  maintained  by  confounding  in  the  popular 
mind  the  distinction  between  property  in  land  and  property  in  things  that  are  the 
result  of  labor.  Once  that  distinction  is  made  clear  . . . private  property  in  land  is 
doomed.” 


“ Here  is  the  conclusion  of  the  whole  matter  : That  we  should  do  unto  others  as 
we  would  have  them  do  to  us, — that  we  should  respect  the  rights  of  others  as 
scrupulously  as  we  would  have  our  own  rights  respected,  is  not  a mere  counsel  of 
perfection  to  individuals,  but  it  is  the  law  to  which  we  must  conform  social  insti- 
tutions and  national  policy  if  we  would  secure  the  blessings  of  abundance  and 
peace.” 


“ Political  economy  is  the  simplest  of  the  sciences.  It  is  but  the  intellectual 
recognition,  as  related  to  social  life,  of  laws  which  in  their  moral  aspect  men  in- 
stinctively recognize,  and  which  are  embodied  in  the  simple  teachings  of  Him  whom 
the  common  people  heard  gladly.” 


40  Japanese  Notions  of  European  Political  Economy. 

With  these  quotations  from  the  great  thinker,  and  heartily  com- 
mending their  truth,  the  Commissioner  of  Japan  closes  his  preliminary 
report. 

Respectfully  submitted, 

With  the  highest  respect  and  esteem,  by 
Your  Excellency’s  faithful  servant, 

Tentearo  Makato,  Commissioner. 


Accompanying  my  main  report  are  copies  of  all  of  Henry  George’s  books,  and 
the  commissioner  respectfully  suggests  that  a study  of  “ Progress  and  Poverty”  will  be 
facilitated  by  a preparatory  reading  of  his  “ Land”  question,  his  “ Social  Problems,” 
or  his  “ Science  of  Political  Economy”  (all  now  rendered  in  our  tongue).  To  all 
who  will  carefully  take  this  course  there  will  be  opened  to  sight  the  grand  possibili- 
ties of  the  future, — the  noble  destiny  of  the  human  race. 


The  commissioner  is  well  aware  that  if  his  report  had  been  in  accord  with  ac- 
cepted beliefs  he  should  have  been  at  once  hailed  as  an  authority,  a light.  But  that 
now,  while  even  the  radical  “ Fiji  Shimpo”  will  extend  no  praise,  M.  Siki,  in  the 
conservative  “ Nichi  Nichi  Shimbun”  of  Tokyo,  will,  at  first  anyhow,  denounce 
him  as  an  anarchist,  an  enemy  to  mankind,  the  adoption  of  whose  views  would  be  fatal 
to  Japan.  Tentearo  Makato  will  confidently  and  calmly  await  the  subsidence  of 
passion  and  the  sober  second  thought  of  his  countrymen,  so  many  of  whom  have  the 
spirit  of  the  “ siudosja,”  and  it  will  be  well  to  remember  that,  while  many  a poisonous 
draught  is  savory,  there  is  much  truth  in  our  old  maxim  that  “good  medicine  is  bit- 
ter in  the  mouth.” 


41 


Japanese  Notions  of  European  Political  Economy. 


“ Such  dupes  are  men  to  custom,  and  so  prone 
To  rev’rence  what  is  ancient  and  can  plead 
A course  of  long  observance  for  its  use, 

That  even  servitude,  the  worst  of  ills, 

Because  delivered  down  from  sire  to  son, 

Is  kept  and  guarded  as  a sacred  thing.” 

— Cowper. 

No  one  really  defends  private  property  in  land  ; he  defends  property 
in  things  produced  by  labor  and  that  have  been  exchanged  for  land. 
Reason  is  overthrown  by  custom,  whose  votaries  hold  that  private  land 
titles,  having  been  granted  and  sold  and  bought  for  centuries,  cannot 
morally  be  questioned. 

But,  instead  of  dry  land,  suppose  that  King  James  had  granted  to 
Penn  wet  land,  the  great  Lake  Ontario,  forbidding  anyone  to  fish  there 
or  sail  there  without  Penn’s  permission.  Would  that  have  been  right  ? 
Decidedly  not. 

After  it  had  been  sold  in  parcels  by  the  Penns,  would  the  purchasers, 
their  heirs  or  assigns,  acquire  titles  that  the  rest  of  the  people  could 
not  morally  abrogate  when  they  saw  fit  ? Certainly  not. 

Could  private  titles  to  the  lake  ever  become  absolute  in  morals  ? 
No. 

Well,  a cataclysm  removes  the  water  from  that  lake  and  dry  land 
appears.  Would  the  title  of  the  owners,  that  you  reject  as  immoral 
when  applied  to  the  lake,  be  sustained  as  moral  when  applied  to  the 
land  ? 

Adapted  from  Louis  F.  Post’s  “ Lecture  Outlines,”  by  R.  C.  K. 


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